St. Louis Real Estate Investing: City or County?

If you live in St. Louis you’re used to hearing it: “City or county?”

Locals have many ways of asking where you went to high school, but it’s also an important question when looking for investment properties.

The city and the county offer varying lifestyles, so in my experience you’ll want to consider the differences before investing in real estate.

Structures

When we’re strictly considering structures, properties in the city tend to be older, generally 100 years or so, and much of them are all-brick. The buildings usually have smaller closets, bathrooms and kitchens and they don’t always have central heating and air. Nearly every property in the city also has a basement, typically unfinished. The city also has more multi-family properties.

The county was, largely, built during the suburbanization of the St. Louis Metro area, so the homes are generally newer and are wood frame buildings with vinyl siding or some mix of vinyl and brick. Since they’re more modern they’ll have larger kitchens, bathrooms, and closets, and not every county property will have a basement as many are built on slab foundations.

So, if you’re looking for a multi-unit 2-4 family investment property, you’ll have better luck looking in the city. If you want to flip a single-family property the county is, usually, a better bet. There are single-family properties in the city that I flip but I focus on certain areas with high property value and good rental income. There are exceptions to these general rules, but they are useful guidelines as a starting point.

Communities

While structures are important to real estate investment, communities matter just as much. You have to consider what the communities offer residents, and the biggest difference in St. Louis is schools.

Schools in the city are generally worse than those in the county; some of them are not state accredited. That makes it more difficult to sell a single-family house that’s in the district of a non-accredited school. On the flip, the city has lower taxes than the county. If you have rental properties you’ll recoup your investment capital faster.

Rentals

If you know you want to be a landlord then I’d recommend looking in south city. It’s been one of my favorite areas since I started investing in real estate in St. Louis and it has only gotten better. If you’re looking for a house to flip then Afton, Lemay and Overland in the county along I-170 are great areas to look at for single-family homes. Beyond that my only advice is don’t go to an area you’re not comfortable being in at night.

Of course you can also rent single-family homes; you’ll pay less for maintenance since the tenant usually puts work into the property by maintaining the lawn and paying for all utilities.

Renting a single-family home can also can lead to a rent-to-own deal with the tenant which is a great situation for both parties. If you decide to sell a single-family home that was formerly a rental property those homes also tend to appreciate faster than multi-unit buildings.

If you’re looking for a multi-unit rental property then I recommend finding ones that are mismanaged and under-performing. They usually require easy fixes and provide you with instant equity. Neither single-family or multi-units are bad choices, some just might work out more in your favor.

Turnkey

Another transaction that I like works well in both the city and the county – turnkey investment properties. Typically I find and rehab a property, and then rent it out immediately while looking for an investor that wants another income property. While searching for a buyer the property is making me money and the new owner will collect rent right after closing.

I find that there are plenty of great opportunities for investment properties in both the city and county, and it’s a matter of considering what type of work you want to do.



Peter MacKercher

Peter Mackercher is the principal and investment property specialist at Mogul Realty. With over a decade of experience in real estate in St. Louis, he brings tested strategies and knowledge to every project he works on.