HomeBlogHome SellingCommon Investment Property Mistakes in St. Louis Share on Like what you see? Share with a friend. Common Investment Property Mistakes in St. Louis Chris Kirshenboim | December 23, 2024 Last updated August 9, 2026 Many people are diversifying away from stock market investments to more tangible portfolio assets. Real estate investments are certainly the most common tangible asset investors start with. Buying a rental in St. Louis looks simple on a spreadsheet and gets complicated the day you own it. The investment property mistakes that hurt most are not exotic, they are the same four every year. Underestimating carrying cost is first: vacancy between tenants, turnover paint, the furnace that fails in February, and the fact that a landlord cannot postpone a repair the way an owner-occupant can. Second is buying on the headline price instead of the neighborhood. Two blocks in St. Louis County can rent a thousand dollars apart, and no renovation fixes a location. Third is skipping the sewer lateral and the roof at inspection, which on pre-1930 brick housing stock is where the real money hides. Fourth is having no plan for the exit, so the property gets held long past the point it earns anything. Most of the buyer mistakes on investment property come down to running the numbers on the good year rather than the average one. If you already own a rental in St. Louis and it has stopped making sense, that is a different question with a simpler answer. Our team buys tenant occupied and vacant rentals as-is, with no repairs and no commission. Read how we buy houses, and if a listing would net you more we will tell you that. 4 Common Investment Property Mistakes Buyers Make in St. Louis Underestimating Costs “If you buy it they will come,” seems to be the mentality of many first-time real estate investors. They think that just by getting the title on a property, renters will flood in and thus the money will flow. This isn’t the case. In fact, there are many costs first-time investors don’t anticipate that end up costing them because they didn’t factor those into potential rents. These include maintenance, advertising, and repairs. Unlike your own home where you might leave a repair for a while, landlords must fix things in a timely fashion. Additionally, tenants don’t always remain in the home and often trash the place while living there. You need to factor vacancy time and property rehab in between tenants. Poor Location Selection It has been said over and over when it comes to real estate, “Location! Location! Location!” Real estate investments are no exception. Buying a property that is in a less than desirable location makes it difficult to both rent and resell. Sure, great deals can be found in depressed markets and unsafe neighborhoods, but at what cost? You may have trouble making your money back after a rehab, let alone making a profit on the deal. Rehabbing properties in high-risk neighborhoods can be profitable but you need to make sure you understand the risks. So make sure to research neighborhoods thoroughly that you are interested in investing in. Renting to those in high-risk neighborhoods can mean more problems with upkeep and maintenance, including vandalism, drug and gang issues. Not Understanding Financing Buying a personal property and buying an investment property follow two very different financing principals. You won’t get the same great financing programs and rates available to owner-occupied homes. In fact, everything from insurance to property taxes will increase with investment properties. Expect to have higher down payment requirements for investments and be prepared for higher interest rates. Conduct extensive market research to make sure your property will yield the rental income or sale proceeds to pay the higher costs and still have profit. Failing to Perform Due Diligence Just because you plan on rehabbing a property doesn’t mean you should ignore all the due diligence requirements of sound investing. This means pulling all title reports and having inspections and disclosures note anything that might be wrong with the property. Finding out there is a huge lien on the property transferred to you upon the sale could lead to foreclosure. Similarly, not paying attention to a potential foundation issue can lead to thousands in repairs you weren’t budgeting for. Buying a distressed property doesn’t always mean you're buying a money pit; learn to assess properties to properly budget for repairs and prepare for unanticipated costs. There are always unanticipated costs when buying an investment property, even with sound due diligence. Start small with your first investment. There is no need to learn the ropes with a million dollar apartment complex. Buy a single family home or a small multi-family building for your first few deals. This way, in case you make a mistake, it will be a bit easier to recover from. IF YOU ARE AN INVESTOR IN St. Louis AND ARE LOOKING TO PARTNER ON A DEAL, CONTACT US TODAY! FAQs Frequently Asked Questions What is a realistic vacancy allowance for a St. Louis rental? + Most owners budget between five and eight percent of gross rent for vacancy, and a little more in submarkets with heavy turnover. Budgeting zero is the single most common planning error. Should I sell a rental that still has tenants in it? + You can. The lease transfers with the property, so a buyer who is comfortable inheriting the tenancy can close without anyone moving out and without the rent stopping. How much does a sewer lateral repair cost in St. Louis County? + Replacements commonly run several thousand dollars and occasionally far more when the line runs under a driveway or the street. On older brick homes it belongs on every inspection list.
