There are several ways for you to make money when investing in real estate in St. Louis. You can buy a property and sell it when demand is high and its value has increased, earn rental income by leasing a property to tenants, invest in a real estate investment trust (REIT) and earn dividends, and so on.
If you’re completely new to real estate investment, it’s a good idea to partner with a Missouri realtor who can help you find the St. Louis investment properties that will give you the best returns. Starting out can be a little overwhelming, but certainly not impossible. Just keep the following things in mind:
- Finances. Before you invest, make sure that your personal finances are in order and that you have an emergency fund. Pay off as much of your consumer debt as you can and consider automating savings. Real estate is a major investment and you’ll need cash for down payments, cash offers, and repairs. This should be separate from the emergency fund.
- Market. Get to know the local market. Find out who lives there, who’s moving there, why people are moving into or out of the area, etc. Start with your own community. Talk to your realtor and the locals. Research.
- Network. Get out and talk to people. Go to talks or workshops held by investors or industry leaders, join nonprofit groups within the area, and let everyone know that you are investing in property in St. Louis. The larger your network, the higher the chance of getting more recommendations and referrals.
- Reputation. Many successful investors get a majority of their business through referrals from their network. This means that it is absolutely crucial that you solidify your reputation as a smart, trustworthy investor. Make sure to treat everyone that you do business with professionally, from contractors to lenders to any of your tenants. These people will end up giving more business back to you in the long run.
- Baby steps. Start small if your goal is to have passive income. Investing in rental property is relatively straightforward and a good way to get your feet wet. Try “house-hacking” – buy a multi-unit building and live in one unit while renting out the others. This way you won’t be paying more than one mortgage and your rental income will help pay for other expenses as well.
Real estate investing is one of the best ways to build wealth, but it is not an easy business. If you want to make money at it, you need to put in the time and effort needed to get a deep understanding of the market, grow your network, and build your own investment team.
Check out our investors’ guide for more information on investing in St. Louis real estate and get in touch with us anytime. Call the Cardinal Realty Group at 636.225.0385 or send an email to Hal(at)CardinalRealtyGroup(dotted)com With over 30 years of experience, we know St. Louis’ commercial real estate market better than anyone and we’d love to help you find the right investment in the region.