How to Buy a Short-Term Rental in New Orleans
What You Need to Know When You Plan to Buy a Short-Term Rental in New Orleans
If you landed here because you are curious about owning a short-term rental in New Orleans, maybe you are looking for something you can use when you are here and rent when you are not. Maybe you are looking primarily at it as an investment. Maybe you have already started looking and realized pretty quickly that there is a lot of information out there, and it is not all saying the same thing.
Some of it is inaccurate because it is no longer relevant. Some of it is incomplete. Some of it is flat-out incorrect.
And that distinction matters.
Where people seem to get most confused is incomplete information.
So let’s start by defining what I mean when I say short-term rental.
When I say short-term rental, I mean a residence that can legally be leased for stays of 30 days or less. That does not mean you have to rent it for 30 days or less every time. It does not mean you cannot live in it or use it yourself. It simply means you have the flexibility to do so.
Can you buy a short-term rental in New Orleans?
Yes.
Here is what you need to know.
1. Short-term Rentals Have Been Regulated
But they have not been regulated into oblivion.
There is a difference.
And the people who understand that nuance are the ones purchasing them.
A little background, but not a lot:
New Orleans, like so many cities, has spent years figuring out where short-term rentals fit, what balance looks like, how many should exist, where they are appropriate, in what capacity, and what responsibility an owner has to the people who live around them.
From where I was sitting, including while serving on the Faubourg Marigny Improvement Association board and participating in many of those conversations myself, the filter was never that short-term rentals should cease to exist. The question was how to make room for them without compromising somebody else’s right to peacefully enjoy their home and neighborhood.
Then came bad actors. Then loopholes. Then more regulation. Then litigation, lotteries, exceptions, enforcement and rule changes.
And yeah, I think some of us little guys got screwed in the process.
I was one of them.
That is not really what this article is about, but it is part of why I understand the hangover.
The outcome was not the elimination of short-term rentals. It was to put limits on short-term rental density and requirements around responsible ownership.
That has created scarcity, especially compared with the volume that once existed.
But scarcity has also been mistaken for illegitimacy.
And that is one of the biggest things this article seeks to clear up.
Yes, you can own a legitimate short-term rental in New Orleans.
What will give you the advantage is not memorizing every stage of how we got here, or your ability to defend or refute it to someone else with misinformation.
It is understanding how to shop within the landscape as it exists today.
The old question might have been:
I like this place. Can I Airbnb it?
The better question when you want to buy a short-term rental now is:
What type of property permits Airbnb? Where can I find one? Has it already been used in this capacity? If so, has that use been successful? What evidence exists? Has anybody else bought something like this? And how did it go for them?
If you are new to New Orleans, know that short-term rentals have nuances. You may have witnessed versions of this conversation in other cities or in national media. I was quoted in WIRED during one chapter of New Orleans’ own STR story, and even that piece now reflects a particular moment in a regulatory landscape that has continued to change.
If you have lived here and watched this whole thing unfold, know that some of the information you have absorbed may no longer be accurate, or it may be incomplete.
Either way, here is what you need to know to set the record straight.
What matters now is knowing what questions to ask.
2. Here are Some of the Things Many People Get Wrong
We have heard these from buyers, Realtors and people actively trying to help their clients.
And before we get into the obvious ones, here is another version I hear all the time:
“You can buy an Airbnb if you are willing to do these things that color outside the lines.”
If somebody tells you that, it does not necessarily mean they are trying to convince you to break the law.
It may simply mean that the last time they checked in on this subject, that was how people were doing it.
We are here to talk about how to do it above board.
Here are some of the other statements and questions we hear every day.
“You can’t really buy an STR in New Orleans anymore.”
Yes, you can.
They are not everywhere, but they exist in most parts of the city.
That is not the same thing.
“The permit transfers with the property.”
It does not.
The buyer can apply for and receive their own license.
“If it’s a commercial STR, it must be some kind of loophole.”
This one seems to come from the idea that commercial short-term rental licenses are not currently being issued, so if somebody has one, there must be a trick.
The “loophole” is not understanding how to get around the rules.
It is understanding how to become the owner of a property that is already operating within the appropriate commercial STR framework and then complete the process required of the new owner.
That is a very different thing.
“You have to pay cash.”
No.
Financing options exist. We can put you in touch with lenders who understand this particular property type and can tailor that conversation to you.
“If somebody says a property is STR eligible, I’m good.”
Slow down here.
Just because the MLS remarks or marketing copy say “could make a great short-term rental” or “has been a cash cow for this owner” does not mean that door is automatically open to you.
I do not want to invest in a should, a could or a maybe.
I want to know what has actually been done.
At The Alexandre, a short term rental opportunity this writer represents, for example, we have years of operating history. We have bookings, occupancy, average nightly rates and revenue history.
But for this particular question, another kind of track record matters even more: several recent buyers have purchased residences in the building and successfully obtained their own commercial STR licenses.
There is a difference between saying I should be able to get a short-term rental license and saying someone just did it.
That is useful information.
3. What Should Make You Ask Another Question?
Not give up.
Not panic.
Not run.
Not argue.
Ask another question.
“STR eligible.” Eligible how? Has this been proven? For how long? Tell me how I could be eligible.
“The permit transfers.” What exactly does that mean?
“The building allows Airbnb.” Does the city?
“You should be able to get a permit.” Has that been done successfully? Tell me how.
“Here are the projected returns.” Great. What are the historical returns and occupancy rates while we are at it?
“Everybody does it.” That one is not documentation.
Neither is:
“Well, the owner has been doing it. You should be able to too.”
Also not documentation.
The point is not that an unanswered question means something is wrong.
It means that you need an answer.
Keep asking questions.
One of the clearest examples we have seen came from an agent already actively helping her buyer search for an STR. She was looking through property managers, landlords and off-market relationships because she believed that was how this kind of inventory had to be found.
One of our lending partners ultimately connected her with The Alexandre.
That buyer is now under contract.
That agent was not doing anything wrong. She was working from the same incomplete picture a lot of people have.
And that is exactly why this piece exists.
4. You May, In Fact, 'Need' to Know a Guy
Congratulations.
Now you do.
Can you do this yourself? Absolutely. Do you need a guy? Nah.
Can it go more easily, with less stress and a lot less time spent trying to determine which version of the answer is current? Absolutely.
You now know a real estate broker who knows who to call.
And after all, isn’t that part of the point of agency?
Not simply having somebody sitting in between you and the transaction, but having somebody who knows what questions to ask, when something needs another set of eyes and who to reach out to for the answer.
I am not a card-carrying short-term rental consultant.
I am a real estate broker.
My job is sales and marketing, understanding the product, identifying where a buyer needs more information and getting the right people into the conversation.
Ron Loesel of Zach Smith Consulting has been one of the critical missing pieces for us at The Alexandre. He understands the permitting process, City Hall, One Stop and where a lot of the confusion comes from.
I am happy to make an introduction to Ron.
You do not need to Google his name later and try to remember where you heard it. Whether we are working directly together or not, I am happy to put you in touch with him or someone else who may be able to help you better understand the process.
I like Ron for a reason.
We hosted a conversation together at the building we represent, The Alexandre at 336 Camp Street, with people actively working inside this space.
Ron said something that made me laugh because it was so validating:
“If you’re confused, welcome to my world.”
He also helped clarify something we had heard incorrectly over and over again: this is not about transferring the seller’s commercial STR license into the buyer’s name. The buyer applies for their own license through the appropriate process.
And he has helped buyers at this building that I represent do exactly that.
We also work with lenders who understand the property, property managers operating STRs above board, title professionals, building management and, when the question belongs at City Hall, City Hall.
Most people buying a place because they spend an awful lot of time in New Orleans do not also have an awful lot of time to deal with New Orleans.
That is part of what the right team is for.
5. Why Should You Take My Word for Any of This?
Fair question.
You should know where I am coming from.
I write this not only as the salesperson hired to sell these units, but as someone with nearly a decade of lived experience inside New Orleans short-term rentals and as a former owner myself.
I started operating an in-home residential STR in 2016.
I later served on the Faubourg Marigny Improvement Association board, where we did not merely discuss proposed legislation. We presented policy recommendations for consideration.
I attended City Hall meetings.
I spoke at City Hall meetings.
I participated in the process as the rules changed more than once.
I went through the lottery and special-exception process myself.
And I ultimately lost the ability to operate my own residential STR after years of trying to stay compliant.
I have also spoken publicly about that experience and been quoted locally and nationally, including by WDSU and WIRED.
So this is not something I started thinking about because we got a listing and I wanted to make sure I got a commission.
Becoming a host gave me experience.
It also gave me empathy for why people would want to run a short-term rental, a deep understanding of why people are confused, and a very low tolerance for pretending something is simple when it is not.
I am sympathetic to why people have incorrect information.
I understand why some people are apprehensive.
I understand why some people are staunchly anti-short-term rental and why others are staunchly pro.
For what it is worth, and I am stealing a line from Ron here, I am anti-short-term rentals.
Let me clarify that the way he did.
I am anti-illegal short-term rentals.
What we both are is pro-short-term rentals that can operate without compromising somebody else’s peaceful enjoyment of their home or neighborhood.
And the good news is that you are not the first person who has had to figure any of this out.
In our building alone, we have helped three buyers navigate this process in the past year, including as recently as two months before writing this article.
So Who's Actually Buying These Things?
We have received inquiries from people of every kind.
We have heard from people interested in buying multiple units because they were looking primarily at the investment math. Sometimes that math worked for their goals. Sometimes it did not.
We have heard from people who considered making a condo in the building their full-time New Orleans home and ultimately decided they preferred something with a more residential flavor.
And then there are the sometimes people.
People who are routinely in New Orleans for business. People who are season-ticket holders, whether that is sports or the arts. Parents of university students. People who come here frequently to visit family. And people who left New Orleans for any number of reasons but plan to come back often.
It is often those people we see moving forward.
That is not to say this is inherently a better fit for one buyer than another. It is simply what we are witnessing.
For someone already spending significant time here and significant money staying in hotels or other people’s rentals, the proposition is different. They can own something that is theirs when they are here, share it with other people when they are not and offset some of the cost of ownership and the money they were already spending to stay in New Orleans.
For some people who have left New Orleans but continue returning frequently, there is another layer to it. They want to keep a part of themselves here without taking on the responsibility of caring for a large and/or historic home.
That is a very different idea from get rich quick off your neighbors.
Frankly, between acquisition costs, financing, condo fees, management, insurance, maintenance and the other costs of ownership, New Orleans offers relatively few obvious get-rich-quick schemes.
That is not really what we are seeing here.
Why is Cool Murphy Talking About Short-term Rentals So Damn Much?
I have gotten a little bit of a reputation lately for being bullish on them.
That is not because I woke up wanting to become a short-term rental consultant.
I did not.
I do not mind the questions I receive, but it is not my aim to know everything that is, was or will be about short-term rentals.
What I do enjoy is the art of making complex ideas digestible and delivering truths, whether they are easy to share or not.
More importantly, Cool Murphy took on the inventory of a longtime client.
That client owns The Alexandre.
They have operated these 18 units through five years of operation, which also coincides with the holding period connected with the historic tax credits used in the building.
They are now selling the units individually because they would like to move their capital into other projects.
Period.
And, by the way, those projects are not all short-term rentals. They are mostly restoration projects.
My job is to help them reach that goal.
And somewhere in the process of doing that, we encountered one hell of a bottleneck.
We have conducted more than 50 showings.
Buyers showed up. Agents showed up. Interest showed up.
But repeatedly, the facts about the product did not line up with what people believed about short-term rentals in New Orleans.
Some agents did not know inventory like this existed. Some were looking through property managers, landlords and off-market contacts because they thought finding it required knowing somebody. Some buyers believed the seller’s permit needed to transfer. Some assumed financing would be impossible. Others simply did not trust that the opportunity was real.
So I treated it like I treat any bottleneck.
Find out where people are getting stuck. Figure out whether what is causing it is fact or fiction. Address the facts. Eliminate the fiction.
We gathered better information. We brought in people who actually work in this category. We held educational conversations. We learned the permitting pathway. We found lending partners. We pushed for better unit-level financial data. We changed how we explained the inventory.
And candidly, I learned one hell of a lot myself.
That makes me better at my job representing my client, this seller.
It also makes me better at my job conveying what is possible to curious parties, including buyers.
And apparently it has made enough people think I am an STR consultant that I now get calls about random short-term rental issues.
I am not.
But I am happy to direct you to somebody who can help.
My job is still the same: help people buy and sell real estate.
Okay, Where Are these Units You Keep Talking About?
We have mentioned The Alexandre and 336 Camp Street enough times by now that you are probably asking me to get to the point.
What is it?
Happy to.
The Alexandre is at 336 Camp Street, one block from the French Quarter.
It is an 18-unit condominium building in a historic newspaper-alley building with two commercial ground-floor spaces.
And yes, these are condos.
This is not a co-op.
You are not buying a share of a building.
This is not a timeshare.
You are buying your unit.
Three residences have sold. One is under contract. At the time I am writing this, that leaves 14 currently available.
The residences are furnished and turnkey. They have years of actual operating history, including revenue, occupancy, average nightly rates and bookings. There are management options if you do not want to operate one yourself, and recent buyers have successfully obtained their own commercial short-term rental licenses after purchase.
There is an elevator and an accessibility lift. The building is dog-friendly.
You can use your residence yourself.
You can rent it for a couple of nights.
You can rent it for 30 days.
You can rent it for 365 days.
The point is flexibility.
The building sits one block from the French Quarter, near Lafayette Square and Canal Street, within an easy walk of the Warehouse District, Convention Center, National WWII Museum, Superdome and everything the French Quarter has to offer.
And If You're Thinking Bigger
Side note: the building also includes two commercial spaces.
The Very Short Version
We realize you may have clicked this because you wanted to know whether you could buy a short-term rental in New Orleans and somehow we have served you Thanksgiving dinner when you thought you were stopping in for a light snack.
So here is the plate scraped clean:
Short-term rentals have not been regulated into oblivion. They have been regulated into specificity.
You need to know what you are buying. You need to shop the right category. You need real information. You need people who know what questions to ask and who to ask when they do not know the answer.
And you need a good idea of what your goal is with owning something that can be leased to other people for stays of 30 days or less.
If your goal is to have a place in New Orleans that is yours when you want it, available to other people when you do not, and capable of helping offset the cost of both ownership and the time you already spend here, that opportunity still exists.
No secret handshake required.
Although, yes.
It helps to know a guy.
It’s nice to meet you.
Celebrated for her next-level creative approach to real estate, Elisa Cool Murphy is the author of Prepped to Sell: What Works Even When the Market Doesn't. She is an award-winning, top-performing real estate broker in New Orleans and the founder and owner of Cool Murphy Real Estate.
Contact Her -
email: cool@coolmurphy.com
Facebook: @homeinneworleans
IG: @coolmurphynola
YouTube: @coolmurphynola
phone: 504-321-3194
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