Turnkey New Orleans STR – ~$31K Net Cash Flow – Worth $629K?

Question

Hi everyone,I’m representing a seller with a fully operational short-term rental in New Orleans and would appreciate feedback on pricing and overall deal quality.One challenge has been comping this asset—there are very few buildings in New Orleans with a similar grandfathered hotel-style STR structure and consistent financials at this scale. Curious how others would approach valuation given limited direct comps.Key Financials (2025):• ~$77,400 gross income• ~$60,900 net after management• ~$31,200 net cash flow• ~5.0% cap rate at $629K askingUpside:• Management fees reduced from 20% → 15%• 2026 YTD revenue (through May): ~$34.8K• Projected returns ~5.5%–6.0% with fee reductionProperty:• 4 bed / 2 bath (sleeps 12)• 1,437 sq ft• CBD locationHighlights:• Rare grandfathered hotel-style STR license (no individual permit required)• Fully turnkey with onsite professional management• Consistent, verifiable performanceNotes:• HOA ~$14.8K/year• Fully managed (no self-management allowed due to building structure)Also recently listed on Rabbu to reach STR-focused buyers, but would value feedback here as well.Curious to hear:• Does ~$629K feel appropriately priced?• How would you evaluate this vs other STR deals?• What return would you target for something like this?

Stanley Yeldell · Answer

Sylvia, interesting deal. The biggest thing investors will probably look at here is the cap rate vs risk profile of STRs in New Orleans.

At ~$31K net cash flow on a $629K ask, you're around a 5% cap, which is fairly tight for most STR investors unless there’s strong appreciation or a unique licensing advantage (which it sounds like this property has with the grandfathered hotel-style license).

A few things buyers will likely weigh:

• HOA at ~$14.8K/year is a big line item and limits flexibility
• Mandatory management also compresses returns since self-managing isn’t an option
• Regulatory risk in New Orleans STR markets tends to push investors to want a higher yield

That said, the grandfathered STR structure is a real asset because permitting in New Orleans has become much harder. For the right passive investor who wants a hands-off STR in the CBD, it could still make sense.

My guess is most investors comparing deals nationally would probably target closer to a 6–7% return to feel comfortable, unless they really value the turnkey aspect and licensing.

Curious if most of the interest you're getting is from local buyers or out-of-state STR investors?

Sylvia Hudson · Answer

Thanks for this — this is super helpful and aligns with a lot of what I’ve been seeing in conversations as well.

I’ve actually had a mix of both out-of-state and local interest, which surprised me a bit. I initially expected mostly buyers with ties to New Orleans, but a few of the inquiries have been from investors who have never been here and are specifically drawn to the hands-off structure.

For a smaller unit I have in the same building, I’m seeing more in-state buyers — typically those who understand the market more deeply and are looking at it through a combination of income + tax strategy + long-term hold.

We did have one offer that ultimately terminated during the due diligence period — the buyer was actively comparing multiple deals and mentioned circling back once he has capital freed up in April/May. His offer did come in below asking, which I think speaks directly to your point on yield expectations.

That’s kind of where I’m trying to pressure test things right now:

Do I adjust price to better align with that 6–7% return window most investors are targeting, or focus on getting this in front of a more niche buyer who values the specific advantages here?

Because I do think this sits in a slightly different category than a typical STR:

• The grandfathered hotel-style license removes a lot of regulatory friction

• It’s truly passive (which some investors are actively seeking)

• There’s potential upside with management fees dropping from 20% → 15%, which should push returns closer to the ~5.5–6% range

One thing I’ve been thinking through — and would love your take on — is upside through increased bookings.

While owners can’t self-manage, they can drive traffic (ads, direct marketing, etc.) to the management company’s booking platform. In theory, that could improve occupancy without changing the structure — but I’m not sure how much weight investors actually give to that kind of upside vs just underwriting current performance.

At a high level, I’m trying to figure out:

• Is this best positioned as a yield play (and priced accordingly)?

• Or as a “scarcity + ease” play for a more passive investor who values the licensing and turnkey nature?

Also — if you were trying to get this in front of the right buyer, where would you focus? (BiggerPockets, specific broker networks, STR investor groups, etc.)

Really appreciate the insight here — this has been one of the more helpful perspectives I’ve gotten.