Many rental markets across the country have suffered during the COVID-19 pandemic, with rental values dropping, vacancies rising, and rent going unpaid. In St. Louis, we have had much better luck. After a couple of uncertain months early in the pandemic, our rental market has rebounded nicely, and we’re seeing an increase in demand for rental housing as well as higher rents than we had last year.
This is good news for rental property owners, and if you’re thinking about buying an investment property, you’ll find a competitive sales market. It’s worth the investment, however, because you’ll find a large pool of qualified tenants willing to pay top dollar for a rental home.
Supply and Demand in the St. Louis Rental Market
The demand for good rental housing has increased since people began spending more time at home. Tenants today are looking for functional spaces that include options for work-at-home and even study-at-home considerations. When you’re advertising your St. Louis rental home, make sure you highlight any features that will appeal to this demand. Maybe you include Wi-Fi in your rent or perhaps the home is wired for extra security or smart home technology. Tenants are looking for these features.
Local colleges, including Washington University, have reduced their capacity for on-campus housing, which has driven more tenants into the rental market. Students need a place to live that’s close to campus. You’ll also find that rentals in suburban neighborhoods are also in high demand. With more people working from home, there’s less of a need to be minutes from the office.
St. Louis Rental Home Values
At the beginning of the pandemic, everyone who owned a rental property was bracing themselves for bad news. Rents have dropped in some of the larger coastal markets, but according to Zumper, rental prices in St. Louis are up more than 20 percent in 2021. The new baseline is about $1,000 for a one-bedroom apartment in St. Louis.
Obviously, the price of your rental property will depend on its size, location, and condition. The market is seeing higher values, but you still need to be smart when pricing your property. Make sure you’ve studied what comparative homes are renting for in your area. The season will also impact how much you can ask. With spring and summer typically the strongest period for the rental market, owners are in relatively good shape when they’re listing their vacant units now.
Eviction Moratoriums and the St. Louis Rental Market
A federal eviction moratorium remains in place until the end of June. This means that tenants who cannot pay their rent due to the financial fallout from the pandemic cannot be evicted for nonpayment of rent. They must sign a declaration indicating that their inability to pay is due to job loss or reduced salary that the COVID crisis has caused. Rent is not forgiven. The amount owed will still be owed; you simply cannot evict your tenants for nonpayment right now.
This has caused some financial problems for owners who are not collecting rent. If you have a tenant who cannot pay, the best thing you can do is keep the lines of communication open. Try to get partial payments or set up a payment arrangement where the overdue amount is incrementally added to rent payments going forward.