Kansas City good start?

Question

Hello all,

I am just starting off on my journey into real estate investing and I'm looking for lower cost units with decent rent. I have found that Kansas City Missouri seems to be a pretty good start. The only problem I am really seeing is the vacancy rate. From the data I have been able to collect it seems to be around 11-15%. This would pretty much be a month every year which can quickly add up. I would much rather invest in my local area, but for a 3/1 (that was build over 60 years ago), your paying about $600k - no way I will be enjoying any sort of positive cash flow, along with the crazy market volatility. Any other good markets anyone has had good experience with?

Thanks,

Alex

Lee Ripma · Answer

@Alex Schredl

I invest in KC and I don’t think vacancy is anywhere near that high.

Dan Krupa · Answer

@Alex Schredl - vacancy rates aren't anywhere near that high. More like 4 to 5%.

Meghan Latenser · Answer

We specialize in single-family properties In B to B+ neighborhoods. We advise clients to be prepared for a 5% vacancy. However, none of our clients have experienced those numbers.

Meghan Latenser · Answer

I work for a turnkey company in Kansas City. I also own a few rental properties of my own in B+ neighborhoods in KCMO. I have never experienced high vacancy rents. I have actually had really good luck with long term tenants.

Do you mind if I ask what kind of neighborhood you are seeing 11-15% vacancy rates?

Lee Ripma · Answer

@Alex Schredl

That article says the average MF vacancy is 4.7% which is about right. It’s just in luxury areas that’s it’s higher. As an investor you’re probably not going to buy in luxury areas, you’re targeting B to C+ areas.

Alex Schredl · Answer

Its from an article I found online. I guess I should have been more specific and have mentioned its referring to multifamily homes in the higher end real estate markets in Kansas City.

Here is the article: https://www.bizjournals.com/kansascity/news/2018/12/10/kansas-city-area-multifamily-vacancy-rates.htmlIts also from 2018, so maybe trends have improved? I definitely take the actual investor's word over an article on the internet. What would you guys estimate it at? Im looking for a multifamily building - duplex, triplex, quadplex. Do you think the vacancy rates would be better or worse than for SFR?

Gabe Monroy · Answer

I'm in KC and it is an excellent rent market. I would be happy to find out more information if you haven't given up on it yet!

Kansas City good start?

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