How to Spot a Good St. Louis Rental Property
A St. Louis rental property can be great financial tools. With the right property in the right area, you can create an extra cash flow stream and save for retirement all at the same time. But how do you know if a St. Louis rental property will be worth the investment?
If you’re interested in becoming a landlord, here is our guide on how to spot a good St. Louis rental property.
The renovations and rehabs are minimal
New investors sometimes look to fixer uppers as great investment choices, and while they can be, investors usually underestimate the amount of work and money needed to get the property ready to rent. Before they know it, they’ve invested a lot of money, and now they’re farther in the red. If a tenant is not found immediately, the investor could stand to lose a lot of money.
Fixer uppers can be great, but for first-time investors, stick to properties that need small updates, like a coat of paint. The sooner you can get a tenant in, the sooner you can make money.
Growing days on the market
The longer a property sits on the market,the more the seller is usually anxious to get rid of it. This gives you an excellent negotiation opportunity. You can end up with a great property for a lot less if you target homes that have been on the market for a long time.
Of course, long days on the market may also mean that the neighborhood isn’t in high demand, so check out the rental listings in the St. Louis area. If you see a lot of properties with rent discounts or lower security deposits, then landlords may have a hard time keeping tenants. Consider looking elsewhere if this is the case.
High-end chains abound
Companies like Starbucks, Trader Joe’s and Whole Foods like to look for areas where the residents have enough disposable income to buy their products. If you see an area where any of these high-end chains are going in, then you should consider looking at properties there.
The tenants in this area will usually have a good disposable income level, which is great for you. They’ll be able to pay a good price to rent your property. They’re also more likely to be employed at a good-paying job, so you won’t have to worry about them not paying their rent on time.
Walkable neighborhoods are also in high demand. The closer a neighborhood is to public transportation, shopping and other entertainment districts, the better.
An inherited tenant
With some St. Louis rental properties, you may already have a tenant in place. While this can be a good thing, you don’t want a St. Louis rental property that has a bad tenant. Before you buy, run a credit check and a background check on your tenant to make sure that he or she has a good record of paying on time and keeping out of trouble.
If the tenant comes out clean, then you have a great buying opportunity. If not, don’t disregard the property just yet. You can go back to the seller and try to negotiate for a lower price.