Take Advantage of the Most Consistent Market in the Nation
Building Investment Properties in the Louisiana Bayou
The Baton Rouge real estate market is considered one of the most consistent investment markets in the country because the local housing market is less likely to be impacted by fluctuations in the economy. Baton Rouge is home to some of the country’s largest companies. ExxonMobil, LSU, Turner Industries, and the State of Louisiana are the city’s largest employers and aid in creating a healthy renter supply.
The average rent for studio, one-bedroom, and two-bedroom apartments in Baton Rouge has increased between January and February 2023. Despite those increases, Baton Rouge’s average monthly rent is still below the national average. Buying homes in Baton Rouge is also affordable. The median sale price for a home in Baton Rouge is $220,500 – a 3.3% decrease YOY.
So, what do these stats mean for investors? They show that Baton Rouge represents a stable market for those looking to invest in real estate. With affordable home prices and monthly rent, investors could increase their profitability and scale their portfolio by purchasing property in Baton Rouge.
From January to February 2023, the average monthly rent for:
- A studio apartment in Baton Rouge increased 12% to $840
- A one-bedroom apartment in Baton Rouge increased 2% to $960
- A two-bedroom apartment in Baton Rouge increased by 3% to $1,100
The Baton Rouge Construction Boom
The build to rent industry boomed in cities across the country in 2022, and Baton Rouge was no exception. Nearly a dozen new apartment complexes and multifamily units are under construction or have been renovated in Baton Rouge.
According to the Baton Rouge Area Chamber’s 2023 Economic Outlook, the city’s construction market is projected to create 12,400 jobs over the next two years. The city anticipates $2.6 billion in capital investment projects around the city including multiple apartment complexes and build to rent communities. Baton Rouge’s construction activity is great news for investors. It opens the door for multiple investment strategies to be successful. Of course, different investment strategies will likely necessitate different loan options, so it’s important that investors know which types of loans can help them scale.
Which Loan is Right for Your Strategy?
- Long-Term Rental Loans
- Long-term rental loans are a great option for investors who want to purchase single rental properties or scale their portfolios. They typically come with multi-year, rate, and pre-payment options.
- Investing in student housing and multifamily student properties is a popular long-term strategy among real estate investors because of its high revenue potential.
- At Lima One, for example, we offer 5, 10, and 30-year options, up to 80% LTV on purchase and rate/term refi, and up to 75% LTV on cash out refinances on our long-term loans for single properties.
- The BRRRR Method
- The BRRR method requires two different types of loans: an interest-only fix and flip loan to cover the cost of the purchase and renovations and a long-term rental loan with a lower interest rate and full amortization.
- This investment strategy can be a great way to make money on rental property investments and rental real estate without a huge initial outlay of capital.
- DSCR Loans
- DSCR – Debt Service Coverage Ratio – loans allow investors to finance properties without using their personal income to qualify.
- Whether you own one single family rental, a portfolio of SFR homes, or a multifamily unit, DSCR is key to evaluating the risk and profit potential of your investment.
How Can Investors Be Successful in Baton Rouge?
Baton Rouge holds a lot of promise for real estate investors. With a booming construction market and affordable housing, investors have the freedom to try multiple strategies to find the right one. The right strategy is just as important as working with the right lender. When you begin your search for the best construction loans in Louisiana, look no further than Lima One Capital.
Lima One is one of the best lenders in the industry. We offer the best loans for rental property financing from simple bridge loans, rehab and fix & flip financing, and stabilized multifamily loans to the most complex structured finance solutions. With a nationwide presence as a trusted lender, we offer a robust suite of products designed to help every investor regardless of their investment strategy. As the premier lender for real estate investors, our goal is to help investors scale their business and close deals quickly.