The Case for St. Louis Real Estate Investing

“Although I don’t live in St. Louis, I invest there for several reasons. First, it’s a beautiful city, and the architecture is appealing.  The houses in south St. Louis just beg to be made beautiful. And it also offers great value. The rate of return on investment ranges from nice to phenomenal.” -Investor, Sandy Fox

Like any investing endeavor, much of your profitability in real estate investing is dependent on market conditions. As the advice goes, make your money when you buy, when prices are low — just as they are in St. Louis.

For over 20 years St. Louis has been affected by an exodus of people from the city to the suburbs. The causes are well-documented, but in recent history the city has made numerous efforts to curb that trend and attract new residents to the city. That’s come from new developments, such as the overhaul of Jefferson National Expansion Memorial surrounding the St. Louis Gateway Arch and the development of Ballpark Village next to the newly-constructed Cardinal’s Busch Stadium. Those are just a few examples; there are many others across the city.

While the exodus was bad for the city, it has been great for investors. Historically, the city of St. Louis’s housing stock prominently features some of the highest-quality brick in the nation, thanks to a city ordinance that required buildings to be built of non-flammable materials during the city’s hay day and the wide availability of clay in the area. Before the exodus to the suburbs many wealthy families lived in the city limits and built beautiful brick homes, many of which are now available at very low prices. The craftsmanship of these properties is hard to match anywhere else in the market. The prices are also low, making the city a haven for investment as property prices are just starting to trend upward.

Those two trends present investors with the chance to still get in on the ground floor. For investors seeking income-producing multi-unit rentals, our specialty, the other upside of St. Louis is that rents have steadily increased while property prices haven’t, boosting returns.

South St. Louis

The part of St. Louis we focus on is south of Interstate I-44, near the Missouri Botanical Gardens, Anheuser-Busch Brewery and just a few minutes south of Forest Park, site of the 1904 World’s Fair. This area of St. Louis is centrally located with quick access to all of the city’s major attractions and easy access to both I-44 and I-40 interstates. This area is also starting to see rapid change and development, both commercially and in the residential sector. All of this combined makes south St. Louis a prime investing market for both local and out-of-town investors, whether starting out or expanding your portfolio.

You’ll find a complete list of the South St. Louis neighborhoods we usually work in on our resources page, but we also work in the surrounding suburbs and cities, too.

Typical St. Louis City Properties

If you choose to invest in south St. Louis, here are, generally, the kinds of properties you’ll find. Our focus has been on neglected properties that require rehab, allowing for a higher upside in value through forced appreciation. Below we’ve also included example spreadsheets for typical properties and the City of St. Louis’s own residential market analysis from 2014.

Exteriors – Mostly brick structures with sound foundations, good for heat and air expenses. Frequently each building has some distinguishing feature, so most every property is unique in some way.

Interiors – Wood floors are common. Typically smaller closets, bathrooms and kitchens. Air conditioning isn’t always installed, heating is commonly radiators. Unfinished basements are almost ubiquitous.

Usual renovation needs are:

• Patching and painting
• Plumbing
• Electrical
• New stoves and refrigerators
• Cabinetry/tile updating
• New windows, but many lead abatement programs are available to assist with costs

*Most properties are already zoned for residential

Example Annual Spreadsheets:

Test Case 1: 4-family, St. Louis, MO 63116
Test Case 2: 4-family, St. Louis, MO 63118
Test Case 3: 4-family, St. Louis, MO 63109

City of St. Louis’s 2014 Residential Market Analysis:

City of St. Louis Residential Market Analysis, 2014

Our Role

When you invest in a property, you invest in the community. Mogul Realty serves the city of St. Louis by serving our clients. Through our construction and rehabilitation services and responsible property management we are a part of the momentum helping carry St. Louis forward. St. Louis was once the fourth largest city in America, and while that’s changed the fact that it’s a great city to call home never has. There are many ways to be a part of history, and helping revive a great American city from its very roots is an enduring way to make your mark.