Discrepancy between property prices and rental income
Hello - My husband and I are new to the New Orleans area, and are interested in investing in multi-family properties here as buy and hold investors. The real estate market in New Orleans is very hot right now, particularly in up and coming neighborhoods such as the Bywater neighborhood. As a result, prices for multi-family properties in these comer neighborhoods are skyrocketing. What is strange, however, is that the rental rates are really lagging behind. So, as it stands now, you need to pay top dollar to get into the hot areas, but you aren't going to be able to generate any cash flow from the propert you buy, based on the current rental rates. Has anyone seen a dynamic like this in another market or have experience doing a deal in this type of market? Is this a deal-killer? Thanks very much for your thoughts and advice on this.