How is St Louis for Real Estate Investing in 2024? Top Guide

Introduction

How is St. Louis for real estate investing? In short, St. Louis offers a favorable investment landscape with a mix of high renter occupancy, affordable home prices, and value appreciation. This city stands out due to its high-tech economy and presence of blue-chip companies, making it an attractive option for property investors.

Quick Insights:

High Renter Occupancy: Many St. Louis neighborhoods have a strong rental demand.
Affordable Home Prices: Median home prices in the city are lower than the national average.
Value Appreciation: Consistent rise in property values over the past few years.
Economic Growth: Diversified economy powered by tech startups and major employers like Boeing and BJC Healthcare.

Hello, I’m Peter MacKercher. With over 20 years of experience in the real estate industry, I specialize in finding and rehabbing multi-family properties for investors in St. Louis. My goal is to help you build a profitable portfolio in this thriving market.

Let’s dive deeper into why St. Louis should be your next real estate investment destination.

Why Invest in St. Louis Real Estate?

St. Louis offers a compelling case for real estate investors. Here are the key reasons why this city should be on your radar:

High Renter Occupancy

St. Louis boasts a high renter occupancy rate, which is a crucial factor for investors. The presence of several universities, including Washington University, means there is a constant influx of students and faculty looking for rental properties. This keeps rental demand high and ensures steady income for property owners.

Affordable Housing

Compared to other major U.S. cities, St. Louis offers affordable housing. According to a 2022 report from Demographia, St. Louis ranks as the fourth most affordable city worldwide in terms of housing. The median home price is around $201,050, making it easier for investors to enter the market and maximize returns.

Value Appreciation

The city has shown promising property value appreciation. For instance, neighborhoods like Tower Grove South have seen a 17.9% increase in sales prices over the past year. This trend indicates a healthy, growing market where investments can yield substantial returns over time.

Neighborhood	Year-Over-Year Sale Price Change	Median Sale Price	Median Rent	Days on Market
Tower Grove South	17.9%	$256,000	$830	28
Kings Oak	0.0%	$198,000	$1,545	5
Downtown	-10.0%	$135,000	$1,040	63

Economic Growth

St. Louis is experiencing robust economic growth. The city is home to several Fortune 500 companies, including Ameren Corp. and BJC Healthcare. This economic stability translates to a strong job market, which, in turn, increases the demand for rental properties.

Job Opportunities

The presence of major employers and a diverse economy means there are ample job opportunities in St. Louis. This attracts a steady flow of professionals, further boosting the rental market. The city’s strategic location on the Mississippi River also makes it a hub for shipping and transportation jobs.

High-Tech Sector

St. Louis is not just about traditional industries; it has a thriving high-tech sector. The city is home to numerous tech startups and innovation hubs, attracting young professionals who prefer rental properties. This adds another layer of demand to the already robust rental market.

Blue-Chip Companies

The presence of blue-chip companies like Boeing and Express Scripts adds to the city’s economic stability. These companies offer high-paying jobs, attracting a skilled workforce that needs quality housing options. This ensures a steady demand for both rental and owned properties.

By now, you should have a good understanding of why St. Louis is a prime location for real estate investment. Next, let’s explore the best neighborhoods for real estate investment in St. Louis.

Best Neighborhoods for Real Estate Investment in St. Louis

Downtown

Downtown St. Louis is a hotspot for real estate investment due to its high renter occupancy and vibrant cultural scene. With 84% of households being renter-occupied, the demand for rental properties is strong. The median sale price here is around $130,000, making it an affordable entry point for investors.

Proximity to major attractions like Busch Stadium and the Gateway Arch enhances its appeal. The area’s urban vibe and cultural richness draw both locals and tourists, ensuring a steady stream of potential renters.

Kings Oak

Kings Oak is another neighborhood with high investment potential, boasting a 96% renter occupancy rate. This urban area offers a median household income of $78,750, providing a stable financial environment for investors.

The median sale price in Kings Oak is competitive, and the neighborhood’s convenience and urban amenities make it an attractive choice for renters. High demand and strong rental returns make Kings Oak a lucrative option for real estate investors.

Soulard

Soulard combines historic charm with modern living, making it a prime spot for real estate investment. With 67% of households being renter-occupied, the area shows strong rental demand. The median sale price is approximately $272,000, and properties spend an average of 38 days on the market.

Soulard’s vibrant community life, local events, and proximity to downtown amenities add to its appeal. The median rent is around $957, offering good rental returns for investors. The neighborhood’s rich history and dynamic lifestyle make it a compelling choice for real estate investment.

Tower Grove South

Tower Grove South offers an urban-suburban mix that appeals to a wide demographic. The neighborhood has a renter occupancy rate of 55% and a median sale price of $256,000. Properties here are in high demand, with an average market time of just 28 days.

The median rent is $830, and the area has seen a year-over-year sale price increase of 17.9%. The combination of urban convenience and neighborhood charm makes Tower Grove South a high-demand area for both renters and investors.

Shaw Historic District

The Shaw Historic District stands out for its blend of historical significance and economic growth. The neighborhood has a high renter occupancy rate and a median household income of $72,869. The median sale price is competitive, making it an attractive option for investors.

Proximity to Tower Grove Park and the Missouri Botanical Gardens adds to its appeal. The area’s historic charm and robust rental market make it a prime investment opportunity.

Downtown West

Downtown West is a key player in St. Louis’s real estate market due to its strategic location and high renter occupancy rate of 84%. The median sale price is around $130,000, and the area is known for its cultural hotspots and proximity to major attractions like Busch Stadium.

The neighborhood’s urban setting and access to nightlife make it highly desirable for renters. This confluence of cultural richness and high rental demand crafts a compelling narrative for real estate investors.

Next, let’s delve into the overall dynamics of the rental market in St. Louis and how they impact investment decisions.

How is St. Louis for Real Estate Investing?

Rental Market Dynamics

St. Louis boasts a high renter occupancy rate, which is a key factor for investors. With a steady demand for rental properties, the city offers a favorable landscape for rental investments. Areas like Tower Grove South and Soulard have shown particularly high demand, with Tower Grove South experiencing a median rent of $830 and a 17.9% increase in sales price year-over-year.

Rental returns are promising, thanks to the city’s affordable property prices. For instance, the median home value in St. Louis stands at around $171,870, making it one of the most affordable major cities in the U.S. This affordability, coupled with rising rental prices, ensures good rental yield for investors.

Property Value Trends

St. Louis has shown consistent value appreciation in its real estate market. Neighborhoods like Tower Grove South have seen a 17.9% increase in median sale prices over the past year. This trend isn’t isolated. Other areas like Kings Oak and Downtown, despite some fluctuations, contribute to the overall market stability.

The median sale price for residential homes in St. Louis has risen by 3.5%, reaching $300,000. Townhouses and condos have also seen a 7.9% increase, with the median price hitting $219,000. This steady rise in property values indicates a robust market, making St. Louis a promising location for real estate investments.

The city’s high-tech economy and the presence of blue-chip companies contribute to its economic stability. This economic vitality ensures a continuous influx of professionals, further boosting the demand for rental properties and supporting the upward trend in property values.

Next, we will explore the key factors to consider when investing in St. Louis real estate.

Key Factors to Consider When Investing in St. Louis

Location

Location is crucial when evaluating real estate investments. In St. Louis, properties near schools, shopping centers, major highways, and public transportation hubs tend to appreciate faster and attract more renters.

Areas like Downtown and Kings Oak offer urban convenience and cultural vibrancy, making them highly desirable. Meanwhile, neighborhoods like Tower Grove South and the Shaw Historic District offer a blend of historic charm and modern amenities.

Pro Tip: Spend time in the neighborhood you’re considering. Walk around, visit local shops, and talk to residents to get a feel for the area.

Property Condition

The condition of the property significantly impacts your initial investment and potential returns. Properties needing significant repairs or renovations might require a higher upfront investment but can offer substantial returns if managed well.

For example, many investors in St. Louis opt for fix-and-flip strategies, buying properties that need work, renovating them, and selling them for a profit. This can be lucrative but requires a good understanding of construction and renovation costs.

Quick Tip: Always get a professional inspection before purchasing to uncover any hidden issues.

Financing Options

Financing is a key component of real estate investing. Here are some common options:

Mortgages: Traditional bank loans are a popular choice. They offer lower interest rates but require a good credit score and a substantial down payment.
Hard Money Loans: These are short-term loans, usually from private lenders, with higher interest rates. They are easier to qualify for and can be a good option for fix-and-flip projects.
Crowdfunding Platforms: These platforms allow you to pool money with other investors to fund larger projects. While this diversifies risk, it also means you have less control over the investment.

Economic Conditions

St. Louis boasts a robust economy with a mix of industries, including tech, healthcare, and manufacturing. The presence of blue-chip companies like Boeing and Ameren Corp. ensures a steady job market, which in turn supports housing demand.

The city’s affordable housing market is another plus. With a median home price of around $219,000, St. Louis offers attractive entry points for investors compared to other major cities.

Rental Demand

High renter occupancy rates make St. Louis a strong rental market. Areas like Soulard and Downtown have high demand due to their cultural attractions and proximity to employment centers.

The median rent in St. Louis is competitive, offering good rental returns. For example, properties in Central West End are known for their high rental yields, making them a favorite among investors.

Insight: Look for neighborhoods with a mix of long-term renters and short-term rental opportunities to maximize your rental income.

Next, we will answer some frequently asked questions about investing in St. Louis real estate.

Frequently Asked Questions about St. Louis Real Estate Investing

Is Saint Louis a good place to invest in real estate?

Yes, St. Louis is a promising place for real estate investment. The city offers affordable home prices and a high renter occupancy rate. Many areas, like Soulard and Downtown, are popular due to their cultural attractions and proximity to jobs.

Fact: The median home value in St. Louis is around $171,870, making it one of the more affordable cities in the U.S.

Is St. Louis, Missouri a good rental market?

Absolutely. St. Louis has a high demand for rental properties. Neighborhoods like Kings Oak and Tower Grove South are known for their high renter occupancy rates. This demand ensures a steady rental income for property owners.

Statistic: The median rent in St. Louis ranges from $900 to $1200, depending on the neighborhood.

Is it a good time to buy a house in St. Louis Missouri?

Yes, now is a good time to buy. The market has shown value appreciation over the past few years. For instance, the median sales price for residential homes has risen by 3.5%, reaching $300,000. This trend suggests that property values are likely to continue rising.

Trend: Neighborhoods like Forest Park Southeast and Botanical Heights are seeing significant growth and new developments, making them hot spots for investment. source

Next, we will discuss key factors to consider when investing in St. Louis real estate.

Conclusion

Investing in St. Louis real estate offers a wealth of opportunities due to its favorable market conditions. From high renter occupancy to affordable housing, the city provides a fertile ground for investors looking to maximize returns.

Investment Potential: St. Louis has shown steady value appreciation over the past few years. For example, neighborhoods like Tower Grove South have seen a 17.9% increase in sales prices, making it a prime area for investment. This upward trend suggests a promising future for property values across the city.

High Renter Occupancy: The city boasts a high renter occupancy rate, particularly in areas like Downtown and Kings Oak. This ensures a stable and consistent rental income, which is crucial for long-term investment success.

Affordable Housing: Compared to other major cities, St. Louis offers affordable home prices. The median home price in St. Louis is $201,050, significantly lower than the national average of $281,900. This affordability attracts a diverse range of tenants and buyers, making it easier to fill vacancies and sell properties.

Economic Growth: St. Louis is home to several blue-chip companies and a thriving high-tech economy. This economic stability contributes to job growth, which in turn drives demand for housing. Areas like Central West End and Soulard benefit from their proximity to job centers and cultural hubs, making them attractive to both renters and buyers.

Value Appreciation: The city’s real estate market has shown consistent value appreciation. For instance, the median sales price for residential homes has risen by 3.5%, reaching $300,000. This trend indicates that property values are likely to continue rising, making now a good time to invest.

In summary, St. Louis offers a unique blend of investment potential, high renter occupancy, affordable housing, and economic growth. If you’re looking to capitalize on these opportunities, Mogul Realty can help you navigate the market and make informed decisions.

To learn more about our services and how we can assist you in your investment journey, visit our services page.