One of the biggest questions I’m getting lately is, “Where’s all the cash flow?” If you’re an investor trying to find strong monthly returns in 2025, it’s a fair concern. Let’s break down exactly what’s happening in the St. Louis market – and more importantly, why it still makes sense to invest right now.

Over the last 17 years, we’ve seen dramatic shifts in home values in St. Louis County. After bottoming out in 2012 at around $131,000 following the 2008 financial crisis, we’ve witnessed steady – and in some years, explosive – appreciation. Fast forward to 2025, and we’re now sitting at a median sales price of $270,000.

We saw a major boost during the COVID years, a slight flattening in 2023, and now we’re back on a strong upward trend. Over the past 12 months alone, prices are up 8.5%.

So yes, homes are more expensive, and that’s a big reason why cash flow is tighter than what we saw five or ten years ago.

Let’s talk supply. Right now, St. Louis has just 1.7 months of inventory – meaning if no new listings hit the market, everything would be sold in under two months. For context, a balanced market typically has around 6 months of inventory. We haven’t seen that since 2013.

This scarcity is what’s driving prices up. Buyers are competing, and that competition is pushing appreciation – fast.

Let’s walk through an actual investment example.

I pulled a 3-bedroom home in Overland listed for $168,900. It’s move-in ready, nicely renovated, and in a solid B-class neighborhood – perfect for strong tenant demand. We’ll assume a 20% down payment and a 30-year mortgage at 7.38% (today’s investor rate).

Here’s how the numbers shake out:

Monthly mortgage (P&I): ~$933

Estimated rent: $1,550

Vacancy: 5%

Property management: 10%

Maintenance reserves: 10%

Taxes & Insurance: ~$2,729 annually

Sounds discouraging, right? But here’s where most people stop – and where smart investors keep going.

Even with tight cash flow now, your wealth builds elsewhere:

Appreciation: At 8.5%, this property gains ~$14,000 in value in just one year.

Debt Paydown: Your tenant is reducing your mortgage balance every month.

Rent Increases: In St. Louis, rents have increased by $50/month annually for the last three years.

Let’s look at the return after just one year:

Total ROI: 46%

Cash flow improves every year. By year 3, monthly cash flow jumps to $200+, and your equity position grows substantially.

Absolutely.

This is the exact reason why investors are still buying aggressively – even in a low-cash-flow environment. Because wealth is being built through appreciation, principal reduction, and rising rents.

By year three, you could have:

Over $100,000 in equity

The option to refinance or pull out cash via HELOC

A stronger cash flow position as rents rise and your loan stays fixed

If you’ve got cash sitting in the bank and you're waiting for "the perfect cash-flow deal," you might be missing the bigger picture. In a rising market with limited inventory and high demand, waiting could cost you.

Now’s the time to buy right, hold tight, and let the market do its work.

Reach out to one of our agents or schedule a consult. We’ll run the numbers and help you position your portfolio for long-term success.

Until next time –

Stay smart, stay invested.