St Louis Rental Vacancy Rates Hit Highest Level In Over Three Years

The St Louis MSA rental vacancy rate during the 3rd quarter of this year was 10.6%, an increase from 7.6% the prior quarter and the highest rate since the 1st quarter of 2016 when the rate was 12.2%, according to data recently released by the U.S. Census Bureau.  Last year, the median rental vacancy rate for the St Louis MSA for the year was 6.8%, a 13 year low.


  

St Louis Rental Vacancy Rates – 2016 – Present

(click on table for complete data from 2005 – present)St Louis Rental Vacancy Rates - 2016 - Present

 

The Best Place In St Louis To Buy Rental Property

I’ll begin with a disclaimer. I realize this is a VERY subjective topic and there are about a hundred different criteria one may use to determine the best area to invest in rental property however, having said that, I attempted to do a broad brush analysis from 30,000 feet. I decided to look at which area, in general, offers the best return on investment when it comes to rental property. For the sake of my analysis, I looked at single family homes as rental properties since they are the most common investment by individual investors.

To determine the best rate of return I looked at the median rent for the area as well as median vacancy rate of rentals and median home price. I then determined a rent/value ratio and the area with the highest ratio determines the area with the best potential return on investment.  In computing the ratio I multiplied the median rent by 12 to get the annual rate, then reduced that amount by the vacancy rate and divided the result into the median property value.

As the table below shows, the city of St Louis came out on top with the highest rent to value ratio, 6.48% followed by St Louis County with a 5.45%.

Foreclosure Properties For Sale – Click HERE

Continue reading “The Best Place In St Louis To Buy Rental Property

St. Louis home prices falling;  St Louis rents on the rise

dennis-norman-st-louis-realtor-A report just released by Trulia today which is based on the for-sale homes and rentals listed on Trulia, shows that asking prices for Saint Louis homes for sale decreased 2.4 percent from a year ago however Saint Louis rental rates increased 3.2 percent during the same period.

Nationally, home prices increased 0.3 percent in June from a year ago and rents were 5.4 percent higher in June than a year ago. Continue reading “St. Louis home prices falling;  St Louis rents on the rise

St Louis rents on the rise while home prices on the decline

st-louis-realtor-dennis-norman-hot-rental-market-A report released today by Zillow shows that median rents rose 6.1 percent in St Louis to $1,085 from January 2011 to January 2012 while, during the same period, home prices fell 6.9 percent to $120,300. According to the report, over two-thirds (69.2 percent) of the metro areas covered saw year-over-year gains in rents but only 7.3 percent of the metros saw home values rise during the same period. Continue reading “St Louis rents on the rise while home prices on the decline

Justice Department Settles Housing Discrimination Lawsuit in Rolla, Missouri

WASHINGTON – The Justice Department today announced that Roger Harris, Hediger Enterprises Inc., Carroll Management Group, Forum Manor Associates L.P. and Forum Manor LLC have agreed to pay $295,000 in monetary damages and civil penalties to resolve a Fair Housing Act lawsuit alleging sexual harassment, race and sex discrimination, retaliation and intimidation at Forum Manor Apartments, a federally-subsidized apartment complex in Rolla, Missouri. Continue reading “Justice Department Settles Housing Discrimination Lawsuit in Rolla, Missouri

How to Choose a Real Estate Investment Strategy That’s Right for You

Thomas J. Lucier - Avoid Bad RealtorsUnfortunately, there are no cookie-cutter strategies, which will work for all investors in every single real estate market nationwide. And that’s exactly why, when you’re starting out in this business, you must take your time and carefully analyze a real estate investment strategy and take into account, the:

1. Temperament, knowledge, skill and experience needed to implement the strategy.
2. Amount of cash and credit needed to finance the strategy.
3. Amount of time and energy needed to complete the strategy from start to finish. Continue reading “How to Choose a Real Estate Investment Strategy That’s Right for You

Home ownership still central to the American Dream

Dennis Norman St Louis,  American Dream, Home Ownership, TruliaTrulia released the results of its American Dream survey today, which showed that, despite the tough economy and challenged housing market we are in, home ownership is still central to the American Dream. In fact, 70 percent of American’s said home ownership is a part of achieving the American Dream.  Continue reading “Home ownership still central to the American Dream

The best places to invest in rental property

Dennis Norman, St Louis REALTORLas Vegas, Nevada is the best place in America to buy at rental property at this time according to the newly released “HomeVestors-Local Market Monitor Best Markets to Invest in Rental Property” report. St. Louis came in at number 50 and Kansas City at number 37. Continue reading “The best places to invest in rental property

Buying a home more affordable than renting in three out of four major cities

Dennis Norman St LouisA report released by Trulia shows that, based on current market conditions, it is cheaper to buy a home than rent in 74 percent of major U.S. cities. At the top of the list is Las Vegas with a price rent ratio of 6 (the lower the number, the more affordable it is). At the other end of the spectrum, New York city leads the list of cities where it is cheaper to rent than buy with a price rent ratio six times higher than that of Las Vegas. Continue reading “Buying a home more affordable than renting in three out of four major cities

Should parents of college-bound kids buy an investment property instead of paying for dorm?; St. Louis Mortgage Interest Rate Update

Over the last few months, I have had a few inquiries from parents of college-bound children about investment properties.  The combination of low home prices, low interest rates, and a large inventory of foreclosure and short-sale homes have made buying much more attractive for parents of college-bound children. Continue reading “Should parents of college-bound kids buy an investment property instead of paying for dorm?; St. Louis Mortgage Interest Rate Update

Ten Tips to Avoid Identity Theft When You Move

St. Louis REALTOR, Dennis NormanTypically from early spring until late summer is a busy season for the real estate market with increased home sales as people try to make their move without fighting winter and in time to have their kids in place before the new school year. Now, thanks to a report by Intersections, Inc., a company that provides address monitoring and credit monitoring services, I realize that it is also a season of increased identify theft. They say the risk of identity theft during a move is a result of personally identifiable information being shuffled around from one home to the next and buyers and renters becoming preoccupied with the move and simply overlooking protecting their sensitive documents. Continue reading “Ten Tips to Avoid Identity Theft When You Move

Buying a home more affordable than renting in four out of five major cities

Dennis Norman St LouisA report released this morning by Trulia shows that when it comes to the question “should I rent or buy” the answer is to buy in 80 percent of the 50 largest U.S. cities. Trulia’s “Rent vs. Buy Index” compares the cost of buying and renting a two-bedroom apartment, condominium or townhouse and for the 2nd quarter of 2011 this index shows that buying is the way to go from an affordability standpoint for most areas….the only cities where renting was cheaper than buying were New York, Fort Worth and Kansas City. Continue reading “Buying a home more affordable than renting in four out of five major cities

Can you go to prison for not paying your rent?

My guess is you read the headline, chuckled and said to yourself “no way”. After all, the idea of sending people that could not pay their debts to prison went away over a century ago in the U.S., right? Yes and no….In 1833 the United States abolished Federal imprisonment for unpaid debts and most states did as well around the same time. However, Missouri Representative Gary L. Cross, representing the Kansas City area, has introduced legislation that would subject tenants that do not pay their rent to a criminal charge, a Class A Misdemeanor to be exact. Continue reading “Can you go to prison for not paying your rent?

Low prices and low mortgage rates spurred 2010 vacation home purchases

Dennis Norman St LouisMore than half a million vacation homes were purchased last year, fueled by low real estate prices, attractive mortgage rates and the potential for price appreciation according to research done by the National Association of REALTORS for HomeAway. Continue reading “Low prices and low mortgage rates spurred 2010 vacation home purchases

Rental housing market weathering storm; more tenants former homeowners

According to a survey just released by Transunion, Landlord’s and Property managers appear to be making it through the Great Recession and are seeing improvement in the market from their perspective. In fact, seven out of 10 property managers said their rental properties have no vacancies, an increase of almost 17 percent from a year ago. Only 39 percent of respondents said they’re having difficulty finding residents in today’s economic climate. Additionally, more than 3 out of 4 respondents (76 percent) said rental prices have either remained the same or increased since last year. Continue reading “Rental housing market weathering storm; more tenants former homeowners

7 Reasons to Rent Instead of Buy a Home

joe plemon

Joe Plemon, ChristianPF.com

Owning your own home may still be the great American dream, but, the influx of foreclosures in recent years has made it a nightmare for millions.  If you are considering purchasing a home, I challenge you to at least think through the advantages of renting before you buy.  Here are a few.

1. Less risk

Strangely, risk seems to be the factor least considered Continue reading “7 Reasons to Rent Instead of Buy a Home

Cities where home ownership is more affordable than rental

Dennis Norman

Today, Trulia released it’s “Rent vs. Buy Index” which established a price-to-rent ratio for the 50 largest cities in America (by population), then, based upon that ratio, determined which cities it makes more sense (financially) to rent versus buy. Continue reading “Cities where home ownership is more affordable than rental

Should You Buy A Home Or Rent? Top 10 Cities Where You Should Rent

Dennis Norman

Last month I did an article, “Should You Rent Or Buy A Home?“, in which I discussed a survey that was done by the National Apartment Association which indicated 76 percent of consumers surveyed believed renting to be a better option than home ownership. Well, today Trulia released it’s new “Rent vs. Buy Index” which established a price-to-rent ratio for the 50 largest cities in America (by population), then, based upon that ratio, determined which cities it makes more sense (financially) to rent versus buy.

Trulia Trulia real estate searchThe index looks at the total cost of home ownership on a monthly basis in each city, including what the house payment would be on a 2 bedroom home at the average list price, plus the cost of property taxes, homeowners insurance, closing costs at the time of purchase, home-owners associations dues and, where applicable, private mortgage insurance. They then compared this to the average monthly rent in the same city for apartments, condominiums and town-homes, then computed the ratio between the two numbers.

The tables below first show the top ten cities to rent in vs buy, followed by the top ten to buy versus rent based upon the Trulia Index (for price/rent ratios of 1-15 it is best to buy, 21 or above it is best to rent and for that 16-20 range it is still more expensive to buy than rent, but the “premium” paid for home-ownership may be worth it, depending on the consumers situation).

top-ten-cities-to-rent-versus-buy

Source: Trulia Rent vs. Buy Index

top-ten-cities-to-buy-versus-rent

Source: Trulia Rent vs. Buy Index

 

 

Should You Rent Or Buy A Home?

New Survey Finds 76 Percent of Consumers now Believe Renting to Be a Better Option Over Homeownership

Advantages Cited Include Flexibility to Move to a Different Location with New Job Opportunities

Dennis Norman

Last month I did a post addressing housing affordability, the cost of renting versus owning a home, and whether the real estate market over the past couple of years was causing the idea of home ownership as the “Great American Dream to “lose some of it’s sizzle?

For this reason I found a survey, conducted by Harris Interactive and commissioned by the National Apartment Association, that came out today particularly interesting.   The survey found 76 percent of consumers deem renting to be the more favorable option to owning a home in the current real estate market, a 5 percent increase from 2008. The survey also found that both renters and homeowners are not eager to make any changes in their housing status within the next year, demonstrating low consumer confidence and continued uncertainty in the housing market.

“While some may want to declare the housing crisis over, consumer patterns of behavior are showing otherwise,” said National Apartment Association (NAA) President Douglas Culkin. “The findings in this survey mirror what our members are seeing throughout the country, especially in areas of the country that are experiencing the first signs of economic recovery.”

Highlights from the survey:

  • 76 percent of adults feel that there are advantages to renting versus owning in the current real estate market, an increase of 5 percent from 2008.
    • 64 percent cited having no responsibility for major repairs or maintenance as the primary reason.
    • 50 percent cited financial reasons such as not being impacted by an unpredictable real estate market (33 percent – an increase of 1 percent from 2008), and not being susceptible to foreclosure (tied at 33 percent).
  • Renters are not eager to make a change this year: 60 percent of renters plan to continue renting their current residence or rent new residences within the next year.
    • 12 percent of renters said they have plans to buy a new home this year and only 14 percent believe that buying a house is preferable to renting given the current state of the market.
  • 71 percent of homeowners will stay in their current home over the next year, mirroring almost exactly the response from 2008 (72 percent).
  • 93 percent of adults feel that the financial security of homeowners is more or equally affected by the current state of the housing market – no change from 2008 – illustrating that the economic impact of the foreclosure crisis has not shifted or improved.

“The results are yet to be seen if the tax-credit incentives worked, but the larger issue remains that pushing the idea of homeownership as the only way to achieve the American Dream is not a viable strategy for the future,” NAA’s Culkin said.

I’m not saying that home ownership is for everyone, nor is leasing, but I think the facts in my post last month I mentioned at the outset of this post as well as this survey show that perhaps the tide is changing; over the past 3 years millions of  Americans have lost homes in foreclosure, others have been forced to do short sales or deeds in lieu….it’s hard for this type of experience not to change your outlook.  It may very well be temporary or short-lived though…afterall how many people do you know that go through an ugly divorce and in the end want nothing to do with the thought of ever being married again…..only to turn up married a year down the road?

Who knows, a year or so from now, when the memories of the real-estate market induced pain and suffering has faded, we may all fall in love with the idea of home ownership again….

How to avoid being a victim of a real estate or rental scam

The Internet Crime Complaint Center (IC3) and the Federal Bureau of Investigation have published a report about common real estate scams and rental scams they are finding and how to avoid them. Like most scams there are warning signs and red flags that can help you avoid falling victim; knowing what to look for is key.

The IC3 reminds people to be cautious when using the internet to either advertise real estate for sale or rent or to find a property to rent or buy.

For Landlords and Sellers of Property:

Look out for: Rental scams occur when the victim has property advertised and is contacted by an interested party. Once the rental price is agreed upon, the scammer sends a check for the deposit. The check covers housing expenses and is either written in excess of the amount required, with the scammer asking for the remainder to be remitted back, or for the correct amount, but the scammer backs out of the rental agreement and asks for a refund.

Because banks do not usually place a hold on the funds, the victim has immediate access to them and believes the check has cleared. In the end, the check is found to be counterfeit and the victim is held responsible by the bank for all losses.

For Renters and Home Buyers:

Look out for: The scammer duplicates postings from legitimate real estate sites, alters them, and reposts them. Often, the scammers use the broker’s real name to create a fake e-mail address, which gives the fraud more legitimacy. When the victim sends an e-mail through the website inquiring about the home, they receive a response from someone claiming to be the owner.

The “owner” typically says he and his wife are doing missionary work in a foreign country and need someone to rent their home while they are away. If the victim is interested, he or she is asked to send money to the “owner” in a foreign country. These funds go directly to the scammer, and the would-be renter loses his or her money.

Suggestions from the IC3 and FBI on how to protect yourself from schemes:

  • Do not accept overpayment for rental properties. If you receive a check that’s for more than the specified amount, return it. Do not deposit it.
  • Do not wire funds to people you do not know.
  • Verify potential renters’ income.
  • Request renters’ personal references and follow up with those individuals.
  • Check with your county recorder to learn who owns the property you’re seeking to rent.
  • Call the property manager or association, if applicable, and ask about the landlord.
  • Ask the landlord for a rental application. It’s a red flag if one is not available; most managed properties require an application.
  • Find out how much of a security deposit may be requested in your state. Scammers will often ask for extra money in the form of a deposit.

The following requests can be indicators of fraudulent activity:

  • The would-be tenant wants to rent or purchase the property sight unseen.
  • The potential tenant says he or she is out of the country and he or she would like to send you a cashier’s check.
  • The payment is for more than the agreed upon amount.
  • There’s an urgency to the entire process. For example, the tenant says he or she is arriving in the country next week and needs to establish residency right away.

If you feel you have been a victim of an Internet real estate scheme, you can file a complaint with the IC3 by clicking here.

Tenants-Be on the lookout for rental scams

Dennis Norman
Dennis Norman

By: Dennis Norman

Yesterday, on a post I did earlier on rental scams, I received a comment from Dan with RentalScams.org. I visited RentalScams.org and saw their site is a wealth of information to help tenants avoid falling victim to a rental scam. I am going to post one of their helpful posts here today but invite you to visit their site and check out all the useful information they have available.

FBI issues consumer alert warning of phony online rental ads

Federal Burearu of Investigation FBIBy: Dennis Norman

The FBI has issued a consumer alert warning of phony online rental ads. According to the alert, the scam goes like this:

You can’t believe your good fortune-you find a rental home in a nice area through a Craigslist classified ad at an unbelievably low rate. The landlord-who had to leave the country and travel to Nigeria-asks that you wire him two months worth of rent. You arrive at the home on the agreed-upon date, but there is just one small problem- the house is not actually for rent and its owners know nothing about your agreement.

This latest scam is being perpetrated by Nigerian criminals located halfway aroudn the world and has been seen in a number of U.S. states, perhaps in response to the current housing market- with fewer people buying, more people are renting.

The FBI offers these tips to avoid being victimized:

  • Only deal with landlords or renters who are local
  • Be suspicious if you’re asked to only use a wire transfer service
  • Beware of email correspondence from the “landlord” that is written in poor or broken English
  • Research the average rental rates in that area and be suspicious if the rate is significantly lower
  • Don’t give out personal information, like social security, bank account, or credit card numbers.