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 Woes of Rental Properties
By: Kimberly Cameron
Mon, Jan 10th, 2005 12:42 am

For those that don’t know me, I have a background in investment properties. I’ve worked on projects from trailer parks in Alton to new construction in Town and Country- and a lot of rehab work in between! At the same time, for several years I managed and owned rental properties. As a result, I get asked for advice all the time on what the secrets are to investing in rentals.

This week I saw an article in (Post-Dispatch) that made me decide I should write about this topic.

Over the summer I sold off my last two rental properties (a 12 unit building in South St Louis City and my duplex in University City). At the same time, my primary client I managed properties for also sold off the bulk of his properties. Now part of why I sold mine has to do with personal reasons unrelated to real estate. However a small part of it also had to do with low mortgage rates.

What do interest rates have to do with rentals? When rates get low, it means more people are buying homes, and less are renting. Because rates have been low for so long, there is now a glut of empty rental properties in the U.S. causing apartment complexes to slash rent, offer free months with signed contracts, and other bonuses just to fill up empty units. As an owner, all that eats into your profitability- but the alternative, a high vacancy rate, isn't all that appealing either.

If you want to see the Post-Dispatch article, it was titled: “Low mortgage rates still plague area's apartment owners, developers” By Jack Naudi ff the Post-Dispatch, Published: 01/07/2005.

Although I don’t think its all doom and gloom (there are areas like University City that will always be flush with renters thanks to Washington University), it’s definitely become critical to make sure you know what you are getting into up front because the margins for error aren’t what they used to be.

If you’ve been thinking about getting into rental properties, or other investment projects, feel free to contact me and I’d be glad to talk to you about my experiences.

[ Next Article: Mortgage Interest Rates Slip ]
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Darin "Sid" Cameron spent 15 years working in the technology industry which in 1998 relocated him to St. Louis. In 2004 he took over web development tasks for Kimberly's real estate team and later became the full-time Marketing and Operations Director in 2005. In 2011 Sid launched two brokerages, The Realty Store, Inc. and Realty Referral Partners, Inc, while continuing to perform marketing and operations for Kimberly's team. Sid holds a real estate broker's license in Missouri, CRS certification and was the first CyberStar in the St. Louis area.
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