Located in the heart of middle America, St. Louis, MO is one of the USA’s most iconic cities. From the Gateway Arch to its world-famous Jazz music, the city has something for everyone. Home to over 2,800,000 people, many investors consider St. Louis one of the best markets for cash flow property investment.
There are good reasons for this – St. Louis has an excellent job market, steady population growth, plenty of renters, a high quality of life, and its properties have consistently appreciated in value over time.
St. Louis is competitive among other thriving urban areas, partially due to the expanding work opportunities within the technology and creative sectors. The job market is reinforced by established brands such as Anheuser-Busch, Boeing, Express Scripts, and many others. In 2018, a study by Glassdoor – one of the world’s leading career recruitment sites – found that out of the 50 largest metropolitan areas in the United States, St. Louis was the second-best city for job seekers.
With an unemployment rate of 2.9%, St. Louis excels when compared to the national average of 3.6%. Additionally, the GDP of St. Louis has grown nearly 23% over the last 10 years according to the Federal Reserve Bank of St. Louis. The appeal St. Louis has to potential renters makes sense; a strong job market is the backbone of a growing and thriving city and allows plenty of workers to make St. Louis their home.
St. Louis has welcomed steady population growth over the last decade. Being home to roughly 2,800,000 people as of 2019, it is the 20th largest metropolitan area in the United States. People move to St. Louis from all around the country due to its diverse economy, low cost of living, and numerous entertainment options.
As a biotech and business hub, St. Louis is also home to roughly 40 colleges and universities. It stands to reason that St. Louis is one of the top cities in the US for recent college graduates and those seeking an education.
In St. Louis, renters occupy more than half of the housing units (54%). More than half of the households in St. Louis still prefer to rent rather than own! A population that prefers renting to owning means real estate investors will never have to worry about finding a tenant to occupy their property. With 2.8 million people, and 54% currently renting, property managers have a whopping 1.5+ million potential tenants.
With the 3rd lowest price-to-rent ratio among major US cities, St. Louis is a top choice for cash flow properties. Price-to-rent ratio is defined by the ratio between the value of a property and how much rent it can generate. Put simply, a lower price-to-rent ratio means higher cash returns for investors.
A new study by WalletHub ranked St. Louis among the top 100 locations for renters. The research examined the same critical factors that real estate investors consider, such as rental market activity, job and population growth, and families’ preference for renting as opposed to owning.
4. Quality of Life
St. Louis offers a vibrant lifestyle and community for residents, ranking among the top places to live in the United States. Whether you are a sports fan, looking to progress in your career, or hoping to start a family, St. Louis is an enticing choice.
The cost of living in St. Louis is affordable due to real estate costs that are significantly lower than the national average. Families can choose their ideal home in the community of their choice while staying within their financial means. There are plenty of opportunities for upward growth via property appreciation as the population continues to grow.
St. Louis is also a hotbed for arts and entertainment. World-famous for its jazz music, barbeque, and nightlife, the city has a rich tradition and a vibrant downtown culture. The St. Louis Cardinals have one of the most loyal and exuberant fan bases in MLB. Busch Stadium has been named one of the top 10 venues in the nation by Bleacher Report and Fox Sports for its vantage points, friendliness, and capacity for both indoor and outdoor viewing of sporting events.
As more people flock to areas with unique cultures and plenty of entertainment options, cities like St. Louis will continue to grow. When population increases, so do property values and potential renters.
Choosing the location of an investment property can make or break your investment. St. Louis offers numerous qualities that make it the perfect place to look for your next investment. With a vast array of activities in the city, a rich and expanding job market, and a steadily growing population, St. Louis offers one of the best cash flow markets in the country.
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