The Kansas City real estate market is very stable, even with COVID, and shows signs of being one of the metro locations for investors looking to buy and hold rentals. With traditional ROI returns on rentals, the KC market is strong for several reasons: home prices are still affordable, and the market dynamic for tenants is good. This means that there is an affordable supply of homes, and a persistent demand for rentals.
In a nutshell, affordability is the key benefit for investors in the Kansas City metro area (both Missouri and Kansas sides and suburbs). With median property prices in the $250K range, and very low interest rates (3%), there is a return on investment that makes sense for investors. In fact, the opportunity for Kansas City investors is to upscale. In other words, to avoid the bottom run of the rental market and look for better opportunities. By opening the aperture, and acquiring 2 to 4-bedroom homes rather than townhomes or condos, there is a sweet spot where tenancy improves, delinquencies fall, and the locations are generally better for rental stability.
Flexibility is the key, as extra bedrooms can translate into a broader segment of available renters, and also allow the investor to complete with the on bedroom and efficiency units by simply lowering rent as required to control vacancy. Being higher up on the rental food chain is always a good thing, as vacancy is one of the most expensive issues in rentals.
Another great aspect of the KC market is appreciation. Yes, this has been good with KC being in the top 1/3rd nationally for appreciation of rental real estate. It is expected that future appreciation rates will exceed the national averages for housing in the coming years. This means that your investment will bring more equity to your portfolio in the coming years and it makes sense to invest in real estate in KC.
There are many great neighborhoods to invest in the Kc market. These include: Overland Park, Olathe, Leewood, Independence Plaza, and more. The top county for investment in Johnson County on the Kansas side of the metro.
33rd Company can also help investors find homes that would be great rentals. Contact one of our managing agents today, and we can connect you with a network broker who is familiar with rentals in the Kc market. Call today at: 913-220-2200