Louisiana is home to the world’s longest-running Mardi Gras celebration and has a rich culinary scene that gave birth to dishes like gumbo and jambalaya.Beyond its vibrant culture and unique history, Louisiana offers exciting opportunities for real estate investors. The state is known for its relatively affordable housing market, thriving tourism industry, and diverse rental options, especially in cities like New Orleans and Baton Rouge.
In this guide, we’ll cover everything you need to know about investing in Louisiana’s real estate market, including navigating the financing process to make your investment dreams a reality.
We are providing the following discussion to you for informational purposes only. All investments, including real estate, involve risk, and we encourage you to invest carefully. The information in this article is not intended to replace or serve as a substitute for any legal, real estate, tax, or other professional advice or service. You should consult with a professional in the respective legal, tax, accounting, real estate, or other professional area before making any decisions or entering into any contracts relating to a rental property.
Foreign nationals interested in investing in Louisiana rental properties can take advantage of debt-service coverage ratio (DSCR) loans.
DSCR loans rely on the property's rental income rather than the borrower's personal financial background, making them a practical choice for those without U.S. income or credit history. Unlike traditional mortgages, DSCR loans are part of the non-qualified mortgage (non-QM) category. They are a popular option for international investors looking to purchase U.S. real estate without moving to the United States.
For non-U.S. residents, DSCR loans offer a streamlined way to finance Louisiana rental properties. Key benefits include:
Knowing what lenders look for in a DSCR loan application can make the process smoother and increase your chances of approval. The approval process may vary by lender and individual1. At a high-level, here’s what you should know:
Most lenders: U.S. lenders prefer income earned within the country since it’s easier to confirm. Foreign income requires extra documents like translated bank statements, proof of salary, and U.S. tax returns (if available). Even with full paperwork, approval can be difficult due to differences in financial systems.
Waltz: We recognize that income sources vary. Whether your earnings come from the U.S. or abroad, we accept different forms of proof, including foreign bank statements, employer pay slips, and rental income reports. We also factor in your property’s rental potential for a well-rounded review.
Most lenders: Foreign investors usually need to pay 30-50% of the property’s value upfront. Some lenders also require extra cash reserves, adding to the initial cost.
Waltz: Our terms are more flexible. While a 30% down payment is standard, qualified borrowers may secure a loan with just 25% down. Reserve requirements also depend on your financial background and the property’s expected rental income.
Most lenders: A valid passport and visa are often required. Investors may also need to set up a U.S.-based LLC, which involves filing business documents like an operating agreement.
Waltz: We keep things simple. A passport is all we need for identification. If an LLC is necessary, our Investor Toolkit provides clear, step-by-step instructions for setting one up and getting an Employer Identification Number (EIN).
Most lenders: U.S. lenders rely on domestic credit scores, which makes financing tough for foreign investors without a U.S. credit history—even if they have strong credit in their home country.
Waltz: We take a broader view. Instead of requiring a U.S. credit score for foreign nationals, we consider your home country’s credit history along with other financial factors to give a fair and accurate evaluation.
Find out how international investors have benefited from working with Waltz.
Louisiana offers a range of investment opportunities, with property types suited to different strategies. The best option depends on your financial goals and lender requirements.Here are some common property types to consider:
Investing in Louisiana's residential real estate market offers several compelling advantages:
New Orleans is the largest city in Louisiana and offers a rich cultural scene with a booming tourism industry. The city has a diverse real estate market, from historic homes in the French Quarter to newer properties in neighborhoods like Mid-City and Bywater. With nearly 18 million visitors in 2023, New Orleans presents lucrative opportunities for short-term rentals, especially during major events like Mardi Gras, which draws around 1 million visitors every year. Housing prices in New Orleans have been rising, but with strategic investments, there are still great opportunities for rental income.
Baton Rouge, the state capital, offers a thriving market for real estate investors. As home to Louisiana State University and its 30,000+ students, Baton Rouge sees a consistent demand for rental properties from students, faculty, and staff. In addition to its educational institutions, Baton Rouge has a growing tech sector. The city is also an oil and gas hub, with a local ExxonMobil plant that has been in operation for over 115 years. Plus, the city’s affordable property prices (which cost $215,238 on average) make it an attractive location for long-term rentals and rehabbing opportunities.
Located in the heart of Louisiana’s Cajun Country, Lafayette is a vibrant city with a mix of cultural heritage and modern living. Known for its strong economy, especially in the energy sector, Lafayette offers a range of investment opportunities, and it’s also been ranked Louisiana’s best place to live. The city’s real estate market benefits from a steady demand for rental properties, particularly due to its location near the University of Louisiana at Lafayette. Investors can find potential for rental income in both single-family houses and multi-family properties.
Located just 20 miles from the Texas border, Shreveport is a northwestern Louisiana city that offers an affordable real estate market with opportunities for both long-term and short-term rentals. The city is home to several casinos, medical centers, and a growing entertainment district, creating demand for housing from both residents and visitors. Shreveport’s lower-than-average property prices (just under $130,000) are a bargain for international investors and could entice buyers to generate rental income across multiple properties.
Lake Charles is known for its strong industrial base, particularly in the petrochemical and energy sectors. The city has seen job growth and increased housing demand due to nearby plant expansions and infrastructure development, with over $600 million worth of projects currently underway. Lake Charles also boasts world-famous seafood and over 75 annual festivals, such as the Crawfish and Seafood Festival and the Pirate Festival, which celebrate Louisiana’s rich history.
Louisiana’s real estate market has unique aspects that residential real estate investors should consider before making a purchase decision. Here are three key factors to keep in mind:
Refinancing your Louisiana investment property means replacing your current mortgage with a new one. Whether you want to lower your interest rate or access funds for new investments, the process generally involves:
You can use this option to adjust your mortgage terms, including securing a lower interest rate or altering the loan structure to better match your financial goals. While lowering your monthly payments can improve cash flow, it’s important to note that the total repayment amount over time may increase based on the new terms.
A cash-out refinance enables investors to access their property’s equity by borrowing more than the remaining loan balance. The extra funds can be used for property improvements, buying more real estate, or exploring other investment opportunities, providing a way to grow your portfolio without taking out a separate loan.
Louisiana offers various real estate investment opportunities, from vibrant urban areas to growing rental markets. At Waltz, we simplify the process of securing a DSCR loan. Here’s how it works:
1. Find a profitable investment
Decide on your investment approach. Perhaps you’d like a long-term rental or a property you intend to flip. Choose a property that fits your budget and financial objectives.
2. Gather essential documents
Prepare key paperwork, including a valid passport, proof of income (like bank statements or pay stubs), and details about the property you wish to purchase. Having these ready can help expedite the approval process.
3. Select a lender experienced with foreign nationals
Select a lender who understands the unique challenges faced by international buyers. Waltz specializes in helping foreign nationals navigate U.S. mortgage requirements, providing tailored lending solutions.
4. Set up an LLC and U.S. bank account
Many investment properties require you to create a U.S.-based LLC and open a local bank account2. This process is straightforward, and Waltz can assist you in forming the LLC and obtaining an Employer Identification Number (EIN).
5. Submit your loan application
Once your documents are organized, submit your DSCR loan application. Ensure all forms are accurate to avoid delays.
6. Perform due diligence
Before finalizing the deal, inspect the property, verify its market value, and carefully review loan terms. Confirming that the investment meets your expectations is a vital step.
7. Complete the purchase process
Once all conditions are satisfied, sign the closing documents, transfer the necessary funds, and officially secure your Louisiana investment property. Welcome to the world of real estate investing with Waltz!
