First post: Best neighborhoods to invest in KC?
Investor · CA · Member since 2023 · 16 posts · 9 votes
Hi there! This is my first post and my husband and I are looking to invest in our 2nd property. Our first one is in Branson, MO. One area we are interested in is Kansas City, MO since we already have an STR in Branson. Does anyone have successful STRs or LTRs in the KC Metro area? If so, what neighborhoods, types of rentals (# of br), and rental strategy have you found the most success with and why? Thanks!
@Michelle Park Senyard I'm always changing my opinions on this but here are my thoughts based on my own personal experience in KC...sure some people will disagree lol
Single Family homes-THE BEST. Best in terms of appreciation and ease of mngt & my favorite group of the groups you mentioned.
2/1 (or smaller single family homes) with cheaper rents/price points in lower end areas but still decent and safe such as section 8 they do great if you find the right tenants ..a single retired person or someone who has a disability and good character but just can't afford a better part of town. Many from this tenant class has been crapped on my slumlords and if you treat them with respect and dignity they will stay with you for a long time.
2/1 (or smaller single family homes) in upscale nicer neighborhoods & higher price/rent price points hasn't worked great for me. Sure you get good tenants in a heartbeat ...usually a young couple but they never stay for a really long time because they are usually looking to buy something of their own cause they can afford it or they outgrow the space and want something bigger- high turnover and hard to make a cashflow. (could still work as a furnished monthly (30 day +) rental depending on saturation with that product on the market)
3/2 single family seems to work best as far as getting tenant retention & good appreciation. Tenants usually pack the place with their belongings and it becomes more of a pain for them to move so they stay. Also this size house is comfortable for most people and the tenants stay satisfied & you get more families or couples.
4/2 or larger houses you usually get room mates situation and not families renting. I've had good luck with them and liked my roommate tenants but these houses are larger and cost more to turn and clean when the tenants moved out. I do like this class but high turnover cost should be factored in when considering. Usually room mates stay anywhere from 2-6 years. These houses are good for appreciation & resale or flips as well. Everyone loves a big house with plenty of space when they go to buy their dream home.
Multis- not a big fan of this class. Have had a few of them. High turnover and if you get one bad tenant it can ruin it for everyone in the whole property such as one tenant that lets their dog poop in the yard that doesn't clean up or brings in bed bugs that spread to other apartments or is just a bad character tenant where others don't feel safe etc. Higher expenses in some ways for upkeep such as pest control and lawn care etc. I would consider if it's the right price and a smoking deal with a preference being for 4 units or under such as a duplex.
High End Condos (or any condos in KC) Avoid!!! I'm originally from NYC where people more or less knew how to run condos. But here in KC many of the condos are complete disasters and found them to be just completely inept at running HOAs. They love sticking owners with huge assessments and somehow think that's OK out here and by assessments I've seen them as high as 175K a property and seen many that had them for 10K+. My last building had a 25k per apartment assessment (for a one bedroom)...we sold it and 2 years later they stuck the new owner with a 15K assessment for some unnecessary repairs. And the appreciation not as good as a house.
Also there are some GORGEOUS new condos coming on the market here like sick amazing beautiful condos and more getting built every day (along the street car route). Do you really want to be competing for renters against a building like this ?? with prices as low as $1350/month!!??? I think houses have a niche and can compete with these newer properties cause some people just really prefer a house or have pets etc so (just my opinion) I would go with houses or 4 or under multifamily:)
Happy to chat on KC! There is a lot of pockets and nuances in KC
Thanks Caleb! Can you explain more about what pockets and nuances you're referring to?
Hi Michelle!
I've been investing in KC since 2014. Like the other person commented before I don't recommend STR here at the moment. KCMO has pretty much banned any new ones except owner occupied and other areas around KCMO like north Kansas City and Shawnee have completely banned them. STR seems to be a hot topic in many city councils around here & talks of more bans coming in other areas.
The long term rentals have always been a healthy market here. Most of my rentals get tenants right away. If I were you and investing right now I would be looking at the areas around where the future east-west street car is coming and also around where the north south line is being finished next year. There’s been hundreds of million of development along the route with super high end condos etc.
Here’s an article that just came out about it https://fox4kc.com/news/east-west-kc-streetcar-study-release...
Hi Michelle!
I've been investing in KC since 2014. Like the other person commented before I don't recommend STR here at the moment. KCMO has pretty much banned any new ones except owner occupied and other areas around KCMO like north Kansas City and Shawnee have completely banned them. STR seems to be a hot topic in many city councils around here & talks of more bans coming in other areas.
The long term rentals have always been a healthy market here. Most of my rentals get tenants right away. If I were you and investing right now I would be looking at the areas around where the future east-west street car is coming and also around where the north south line is being finished next year. There’s been hundreds of million of development along the route with super high end condos etc.
Here’s an article that just came out about it https://fox4kc.com/news/east-west-kc-streetcar-study-release...
Hi Laura, thank you this is SUPER helpful. Following up on your investments in KCMO, what kind of long-term rentals have you found most successful? Are they single family homes, multis, or are they high-end condos? Thanks again in advance for your thoughts.
@Michelle Park Senyard I'm always changing my opinions on this but here are my thoughts based on my own personal experience in KC...sure some people will disagree lol
Single Family homes-THE BEST. Best in terms of appreciation and ease of mngt & my favorite group of the groups you mentioned.
2/1 (or smaller single family homes) with cheaper rents/price points in lower end areas but still decent and safe such as section 8 they do great if you find the right tenants ..a single retired person or someone who has a disability and good character but just can't afford a better part of town. Many from this tenant class has been crapped on my slumlords and if you treat them with respect and dignity they will stay with you for a long time.
2/1 (or smaller single family homes) in upscale nicer neighborhoods & higher price/rent price points hasn't worked great for me. Sure you get good tenants in a heartbeat ...usually a young couple but they never stay for a really long time because they are usually looking to buy something of their own cause they can afford it or they outgrow the space and want something bigger- high turnover and hard to make a cashflow. (could still work as a furnished monthly (30 day +) rental depending on saturation with that product on the market)
3/2 single family seems to work best as far as getting tenant retention & good appreciation. Tenants usually pack the place with their belongings and it becomes more of a pain for them to move so they stay. Also this size house is comfortable for most people and the tenants stay satisfied & you get more families or couples.
4/2 or larger houses you usually get room mates situation and not families renting. I've had good luck with them and liked my roommate tenants but these houses are larger and cost more to turn and clean when the tenants moved out. I do like this class but high turnover cost should be factored in when considering. Usually room mates stay anywhere from 2-6 years. These houses are good for appreciation & resale or flips as well. Everyone loves a big house with plenty of space when they go to buy their dream home.
Multis- not a big fan of this class. Have had a few of them. High turnover and if you get one bad tenant it can ruin it for everyone in the whole property such as one tenant that lets their dog poop in the yard that doesn't clean up or brings in bed bugs that spread to other apartments or is just a bad character tenant where others don't feel safe etc. Higher expenses in some ways for upkeep such as pest control and lawn care etc. I would consider if it's the right price and a smoking deal with a preference being for 4 units or under such as a duplex.
High End Condos (or any condos in KC) Avoid!!! I'm originally from NYC where people more or less knew how to run condos. But here in KC many of the condos are complete disasters and found them to be just completely inept at running HOAs. They love sticking owners with huge assessments and somehow think that's OK out here and by assessments I've seen them as high as 175K a property and seen many that had them for 10K+. My last building had a 25k per apartment assessment (for a one bedroom)...we sold it and 2 years later they stuck the new owner with a 15K assessment for some unnecessary repairs. And the appreciation not as good as a house.
Also there are some GORGEOUS new condos coming on the market here like sick amazing beautiful condos and more getting built every day (along the street car route). Do you really want to be competing for renters against a building like this ?? with prices as low as $1350/month!!??? I think houses have a niche and can compete with these newer properties cause some people just really prefer a house or have pets etc so (just my opinion) I would go with houses or 4 or under multifamily:)
@Michelle Park Senyard Riverside for STRs if you can find anything there. Especially the older neighborhood by Briarcliff. @Laura Williams is spot on. I love 3/1.5+ all around. We manage 75 properties and a HOA and have a decent portfolio ourselves. We have renovated and sold over 175 properties. Hands down, the best KCMO properties you can get, especially those built from 1940 to the end of the 1960s.
Thanks @Dan Krupa
I realized my previous post didn’t post links I wanted. Here’s an example to show Michelle a couple of incredible high end condo buildings that have been popping up in KC recently and there are more coming. You can not buy in these and only rentals but this is competition for your high end condos here. KC has upped its game https://threelightkc.com/?gad_source=1&gbraid=0AAAAApHxC...
and another one
Thanks @Dan Krupa
I realized my previous post didn’t post links I wanted. Here’s an example to show Michelle a couple of incredible high end condo buildings that have been popping up in KC recently and there are more coming. You can not buy in these and only rentals but this is competition for your high end condos here. KC has upped its game https://threelightkc.com/?gad_source=1&gbraid=0AAAAApHxC...
and another one
Hi @Laura Williams and @Dan Krupa,
Thanks for the info. In regards to the condos, I see - I thought you had originally meant that condos would be good to invest in but now I understand you were warning about the competition.
Out of curiosity what is the avg. sale price we should be expecting in KCMO for a 3/1.5+ and what is the avg. rent/month you charge on your long term rentals?
We'd be interested in something ~$200K-$300K, and would be willing to put in ~$40-$50K of renovations if needed. I can definitely research this on my own but just want to get a gut check if this would be hard or easy to find in the areas you both invest in.
Laura, super helpful to see your POV on the type of unit breakdown. Thank you for taking the time to explain all of that.
I think with the high end condos it's that they are (in my opinion) inferior investments to houses...A) historically appreciation wise B) also because you have an HOA taking a chunk of your cashflow in HOA fees ...plus potential incompetence in the HOA board...potential assessments C) the rental competition with these beautiful new condo buildings being built. There was (what was nice at the time) a 10-15 plex apartment building that sold in Westport back in 2017 ish and last I asked how it was doing the investor was getting less rent there now than a few years ago cause it's no longer that great compared to these new constructions that have pools and podcast rooms etc.
I do think you could easily get a nice 3/2 house here for your price point in a desirable location. Rents probably would be $1600-2400 depending on location and how nice it was. If you were looking to rent a 3/2 here ...even in a condo ...in a decent area it would be almost impossible to find anything renting for under 1500/month unless its rough or doesn't have laundry or not great part of town etc. If that gives you a sense of rents.
@Michelle Park Senyard - I hate to say this, but it depends on location, turnkey vs renovation, etc... I am happy to email you information. My clients and I are in Clay and Platte County. I want something to BRRR. Typically, I am looking for 75 to 120k to purchase with a 30 to 50k renovation and ARV 175 to 200k with rents being $1,500 to $2,000. We only invest in B-/C+ to A- areas. You can get better returns on rent in other areas, but we want safe areas with excellent school districts. Hopefully, that made sense and helped. If you are looking for turn-key you will be closer to those ARV numbers I mentioned.