Hey BP members,
I am in contact with seller from St. Louis who is looking to sell their property located in the South City area. I did a quick search on the forums and it's looking like the neighborhood is iffy. Can someone knowledgeable from the area confirm this for me?
Also, can anyone recommend a great property management company that will serve that area as well? The seller mentioned he used one previously and was unhappy with them.
Thanks in advance!
Hey Rochelle! Can you define South City? I have a couple of multifamily properties in Dutchtown, managed remotely.
Thanks for your quick response @Jacob Marble !! Per Google maps :), it's in Dutchtown. The property is located on Virginia Avenue not too far from Marquette Park.
Yes, that's my neighborhood. I'm on the same street, in fact. Lots of people look past this neighborhood, with good reason, but I love it. Here's some positive activity going on in the neighborhood:
Real estate agents will mention Tower Grove, to the north, and point to Dutchtown as "path of progress". I focus on cash flow, not appreciation, so it's not important to me.
Agents and property managers tell me that they wouldn't even visit Dutchtown 5 years ago, but now it's very safe. My property manager is female, spends all day in the neighborhood.
I assume the property you are looking at is a SFR or duplex? Mine are 1 bedroom apartments, they rent for $450/mo, $500 if I'm patient. Should get more for a SFR or duplex.
The buildings are *old*. I recommend a complete inspection, it's sure to be eye-opening, but don't plan on fixing everything at once.
It's easier to fill vacancies if you install central air.
What is the condition of the property? "Turn-key" or "needs rehab"?
I have a duplex on Virginia about 2 blocks from Marquette park (actually its like 2 doors down from Urban Eats). I get $750/$700 per month. The thing with South City is it truly is block by block. This duplex I have on Virginia has been a cash cow for the last year. 2 bedrooms usually go for between $675 and $800 in this area depending on the shape they're in and whether they have garages or off-street parking. Single bedrooms usually go for $450 to about $550 depending in the same things. All in all that area is relatively safe... You probably still hear a gunshot or 2 from time to time but in terms of cash flow the area works great. Don't bet on appreciation. You are lucky if properties appreciate 2 to 5% over 5 years...
Thank you both for your responses! This is my first time reaching out to anyone on BP, and now I see why it's so helpful. I expected different responses for sure.
The property is a duplex and was told both places rented between $640-$650. I'm curious to why this one is on the lower end. Will definitely do more digging. thanks again!!
@Rochelle Flowers I grew up there and still live not far from that area. If you want to PM me I can help on specifics. 640-650 would be reasonable rate for smaller size 2 bed duplex, the 4 room style, or less than 1000 sqft/unit style. Or it could be the units are dated, or just the landlord never raised rents. That street has been on the rise recently, as long as you're closer to the park and not closer to Mt. Pleasant neighborhood, Broadway is still a rough street. Feel free to PM me, and if you want a local to go by sometime and look at the place I might be able to do so for you, i'm in the area quite often.
@Mackal Smith I'm glad that you have such a pulse on the rents around here, I'm living in and renting a duplex just down Meramec from Urban Eats so I'm very close to Virginia. I've looked around a bit and my unit is currently rented for $650 which kind of seemed to be the max I've seen (at least recently) fetched by a 2bed 1bath unit - this is an up-down duplex as well and the tenant stays on the first floor.
I feel hopeful for the future with you saying $675-$800 is a normal range. Any specific amenities other than the off-street parking that siginificantly impact rent rates around here? I've toyed with the idea of a dishwasher but not sure how this market reacts to that.
@Nicholas Richard Ray , dishwashers help a little (you can probably get $25 more per month). Most of mine do not have dishwashers. I have a duplex I just refinished on Louisiana. It was actually one I bought a couple of years ago and just happened to have a chance to go through both units. These are shotgun 2 bedrooms. I installed new flooring, counter-tops, wall and trim paint throughout. It does have a carport in the rear but my phones are ringing off the hook at $675/mo. I'm really picky on screening so it will probably take me a month or so to get good qualified renters in there but I would say that is pretty typical for my units...
The best thing you can do is make sure that the units look good. This particular building had drop ceilings that I meant to replace last year, but with renters in place there was just never a good time to schedule it. Getting those off and replacing with good sheetrock well finished and new lighting (along with the other replacements mentioned above) will get me good renters who feel like they are getting a deal at $675...
I have a couple of duplexes on South Grand and one on Dewey in the same general area that are fetching $750/$800/$925, but these are really finished out nicely... (and do include dishwashers btw :)
@Mackal Smith I love the sound of it all. I was hoping to rehab well enough to raise rents in general because this property was neglected for a while before me so it has lots of room for improvement. Main things are the items you mentioned yourself: flooring, paint, counters.
One thing I've been debating as well is the cost vs. benefit of a nicer countertop such as granite or quartz. Home depot counters are cheap but look that way and don't last. Granite and Quartz should be more durable but will it last long enough to be worth it is what comes to mind. Do you use a nicer countertop in the lower-rent units you mentioned? Or mainly the really nice ones you mentioned?
Not in the lower rent units. You don't get the payback from the cost. Just a nice countertop from Lowes or home depot will generally make your unit better than 8 out of 10 of your competition. I'm constantly amazed at the investors who never do even the smallest rehab. It doesn't take much to make your units stand out in a crowd. Clean lines, fresh paint, decent floors will put you miles above most of the competition. As for Granite counter tops, in the lower end rents it just doesn't make sense. Stick with clean neutral paints and Lowes or Home Depot counter tops. Renters won't expect nicer, they won't pay more for nicer, and they won't treat them any better.
I live in South City, and work and play here. I'm happy to help. I like Mogul Realty Group for property management and as the Real Estate team to find property in this area. Let me know if I can help with anything.
@Derek P. Still got that 4plex for sale in Dutchtown? Looking to get started with multifamilies in St. Louis.