Three Reasons to Invest In Rental Property In Saint Louis
The word is out. Saint Louis is not only a great place to live, it’s also a great place to invest in real estate. Saint Louis is a city that, like most midwestern cities, saw the huge decline of urban decay and white flight after World War II. While that was devastating for the city and we are far from full recovery, Saint Louis is positioned to reinvent itself in a big way and become a new destination city for entertainment, careers and, of course, investment. We are already seeing that happen.
There are many reasons to invest in rental property in Saint Louis, but here are the three most important reasons why you should invest in rental property in Saint Louis.
You Don’t Need Much Money
In Saint Louis, you can pick up a 2-family building for 200k or less. At a 90% LTV (loan to value), you can be in your new investment with a 10% cap rate for only 20k out of pocket. You don’t need to look long and hard for this; these deals can be found every day.
You’ll Get Great Returns
The investing market in Saint Louis is not nearly as competitive as other major metropolitan areas. This means that rental properties with solid CAP rates are readily available, and for a lower investment than other large metropolitan areas.
Rents in Saint Louis Are Rising Faster Than Nationally. The median rent in Saint Louis rose by 9.6% year-over-year, as opposed to 5.5% nationally, according to Realtor.com. This trend is great news for anyone who wants to invest in rental property in Saint Louis for the long haul.
A trend like this will not continue forever, but is a great step in the right direction as Saint Louis works to secure its place on the national stage as a strong, healthy city that can compete with other major US cities.
You Can Make a Difference
Saint Louis has long suffered from disinvestment and plagued with a large amount of housing stock that is significantly distressed. That is changing. This is a great time to invest in rental properties in Saint Louis, while prices are still lower, making more money in appreciation and income.
If you are really feeling adventurous, the most lucrative way to invest in multi-family rental property in Saint Louis is to buy, fix and hold. Since Saint Louis has a large amount of historic buildings, you can leverage state and federal historic tax credits to offset as much as 45% of your rehab expenses. This is a bit more complicated than buying turnkey, but is a great way to maximize your returns and restore the city’s outdated and run-down housing stock.
This increases the city’s tax base, improves neighborhoods, drives up property values, and overall, makes the city better for everyone. The best part is that you can get great returns for a low investment in Saint Louis.