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Guide to Investing in Kansas City, Missouri

Guide to Investing in Kansas City, Missouri

Real estate investing has become a popular venture for many, and for good reason. As more people look for different types of passive income and financial streams, investing in real estate has become an effective solution. If you’re interested in getting started but aren’t sure where to plant your roots, look no further than Kansas City, Missouri. 

This Midwestern city is on the western side of Missouri, and sits on the edge of the Kansas-Missouri state line. Known as the City of Fountains, the area boasts the largest privately funded fountain in the world at the Kauffman Stadium, and has deep roots in jazz and the performing arts. Kansas City had a per capita income of $36,728 and a median household income of $69,240 in 2020, according to data from Census Reporter. These figures are both higher than the state and national averages. 

If you’re considering investing in the area, here are a few other aspects to consider when it comes to the Kansas City real estate market:

Population 

Kansas City is Missouri’s largest city in both population and size, which means it’s a location with a lot of potential for real estate investing. According to the U.S. Census Bureau, the city had a population of 508,394 as of July 2021, which makes it America’s 36th most populous city. The Kansas City metropolitan area is even more populous with around 2.1 million people, making it the second largest metropolitan area in Missouri, behind the greater St. Louis area. This means that, whether you buy a property in the heart of the city or in the surrounding area, there’s no shortage of residents to rent to. 

Those living in the area are also ethnically diverse and well-educated; Kansas City has the second-largest Sudanese population in the U.S., along with a strong Hispanic and Latino community concentrated heavily in the northeast region and southwest area of downtown. Not to mention, 37.5% of residents have a Bachelor’s degree or higher, which is about 25% higher than Missouri and 10% higher than the national average. The city also has a large Irish-American community, as the Irish were one of the first large groups to immigrate and settle in the area. With a diverse population with many backgrounds, there’s the opportunity to tap into new communities when it comes to rental property. 

Job Market 

The job market in the area you plan on buying a property in is a good indication of the economy and what your tenants can afford. It can also help you determine if the location has strong growth potential. Kansas City has a balanced mix of white- and blue-collar workers, with many people working as professionals, sales and office workers, and service providers. Some of the leading industries in the area include healthcare, trade, transportation, and manufacturing, with the average annual salary in Kansas City sitting at $54,530. 

According to U.S. News and World Report, Kansas City has an unemployment rate of 6.4%, which is lower than the national average, and has a healthier job market compared to similarly-sized metropolitan areas. The city is also a popular place for young professionals, as it was ranked second on CNBC’s list of U.S. cities with high-paying jobs and a low cost of living. Many single, educated career-starters live in Kansas City for this reason, along with the plethora of social activities in the area. 

Neighborhoods 

Kansas City, Missouri

Kansas City has over 240 neighborhoods, and each has its own history, charm, and attractions. The neighborhood you buy a property in will impact the type of tenants you attract, along with your growth potential and how much you’ll be able to charge for rent. If you’re trying to determine where to invest in Kansas City, here are some of the top neighborhoods to consider. 

  • Brookside: This suburban neighborhood was built in the 1920s and features a historic charm, beautiful homes, and plenty of family-friendly restaurants, shops, and activities. Only a 15-minute drive from downtown Kansas City, the area provides a quiet, small town feel amid bustling city life. Known for its inviting atmosphere, this neighborhood is a good fit for families and young professionals. 
  • Waldo: Located on the edge of the city, Waldo is a lively, tight-knit neighborhood with locally-owned shops, businesses, trendy restaurants, nightlife, and community-run events. This entertainment district also features Kansas City history and is a great place to find affordable real estate. The neighborhood is perfect for first-time homebuyers and those looking to downsize.
  • River Market: River Market is situated in downtown Kansas City and provides urban living with a charming, neighborhood atmosphere. The area features City Market, the region’s largest farmer’s market, and was recently revitalized for young professionals. The 150-year-old riverfront neighborhood is extremely walkable, and has a variety of housing options for a range of incomes and lifestyles with lofts and condos, upscale apartments, and modern homes alike. 
  • Volker: This midtown neighborhood is located just south of downtown Kansas City, and is at the center of the action. With a young and diverse population and sidewalks on almost every street, this area is very walkable to its many activities such as shopping, nightlife, outdoor parks, and historic restaurants. Volker has a laid back atmosphere perfect for young creatives and professionals, and features a variety of real estate options, from early-20th century brick apartments, to bungalows, to large single-family homes. 

Suggested reading: Best Places to Invest in Kansas City, Missouri

Home Values 

Home value is one of the most important aspects to consider when buying rental properties. As a real estate investor, you want to evaluate your investment and make sure it provides long-term value. According to Neighborhood Scout, the median home value in Kansas City is $226,649 with around 206,295 total housing units. Single-family detached homes make up the majority of the city’s housing, with apartment complexes, high rise apartments, duplexes, and homes converted into apartments rounding out much of the rest.

Fortunately for real estate investors, home appreciation in Kansas City has been above the national average with an appreciation rate of 18.84% within the past 12 months. Individual neighborhoods may vary, but these are promising numbers to inform your decision about the potential of the Kansas City real estate market. In addition, nearly half of Kansas City residents are renters, which is perfect for investors looking to start or expand their portfolio. 

When researching properties to buy, determine how much house you can afford with your existing expenses and calculate your expected return on investment. Considering the financial requirements and impact of your real estate investment will help you figure out if it’s feasible. Keep in mind that the average market rent in Kansas City is around $1,411 per month, so make sure this number is enough for you to make a profit. 

Crime and Safety

Crime and safety are other important factors you need to consider when choosing a location for real estate investing. Keep in mind that some real estate investors will gravitate toward A and B Class neighborhoods, which tend to see lower crime rates and higher prices, while others will opt for C and D Class areas, where homes are more affordable but crime tends to increase. According to U.S. News and World Report, Kansas City was ranked 6.7/10 on their crime index, and had higher rates of violent crime and property crime compared to the national rates. In fact, the city has one of the highest crime rates in the U.S., with a crime rate of 56 per 1,000 residents, so this will be an important factor to consider for any investor.

When looking at neighborhoods, consult a crime map of Kansas City. Keep in mind that Washington Weatley, Palestine West, Oak Park Northeast, East Community Team South, East Swope Highlands, and North Town Fork Creek are often reported as some of the most dangerous areas in the city. While crime and safety can be helpful in terms of determining neighborhood class, you’ll always want to ensure both your property and tenants are protected and feel comfortable in the area. Cameras, callboxes, home security systems, and other measures can give both you and your tenants peace of mind and help prevent crime. 

Suggested reading: 6 Factors to Consider When Choosing a Neighborhood to Invest In

Top Schools 

If you’re looking to appeal to families in your real estate investment property, Kansas City is an ideal place to do so. The city has 16 school districts, and offers a good mix of both public and private schools. In fact, many are nationally ranked with graduation rates ranging from 88 – 98%.

Some of the top schools include: 

  • Lincoln College Prep.
  • Ewing Marion Kauffman High School
  • Staley High School
  • Blue Valley West High School 
  • Park Hill High School 
  • West Platte High School 

However, if you prefer to target college students, the Kansas City metropolitan area has 13 universities and colleges, including the University of Missouri–Kansas City which enrolls around 16,000 students. This public research university is ranked in the top 20% of schools on Niche’s list of Top Public Universities in America, and has supported and sustained 7,291 Missouri-based jobs. There are sure to be many undergraduate and graduate students looking for housing in the area, who may reside there long term for their careers. 

Final Thoughts

The Kansas City real estate market is one to watch with a diverse population, low cost of living, and high home appreciation rate. Whether this is your first or fifteenth rental property, this midwestern city offers many opportunities for you to start and grow your real estate investment portfolio.

Get Started Buying Homes With Evernest

Whether you’re purchasing one KC home or one hundred, you don’t have to go it alone. 

If you’re ready to buy your first (or next) investment property, here are 3 steps to get started today:


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