Top Nine Reasons to Invest in Kansas City Real Estate
“Kansas City, Mo., is increasingly becoming a national hub for entrepreneurs,” said Pete Fullerton, president and CEO of the Economic Development Corporation of Kansas City.
But is it a good place for real estate investors to park their money?
Well we would like to think so because if the city and the region as there are quite a few cities in the area are growing for entrepreneurs as well as big companies, that means more people will be coming here to live. More people moving here for new jobs or to start their new company means more people buying houses and needing places to rent.
So why is Kansas City – MISSOURI so awesome?
As an aside – if you don’t know our region has two Kansas Cities – one is on the Missouri side and where we are discussing today, the other is on the Kansas Side.
So let’s take a look at some reasons why Kansas City is great . . .
1. Everyone Meets in the Middle: Kansas City has long been considered a fly over state. There is not a lot here, but it is fairly centralized east to west and north to south in the US. So it has become a great connector for shipping and is by far the largest rail network by tonnage.
2. Everyone is Smart in Kansas City: Ok, so maybe not, but Kansas City does have quite a few major research institutions like Stowers Institute for Medical Research, KU Cancer Center and many other cutting edge new companies. The region is working to attract bio research and tech start ups and Kansas City is the first city to have Google Fiber, creating even more buzz.
3. We are very cultural: Just last week, the Kansas City Star reported the millions of dollars that is generated in the region by the arts. One quote from the article: “We really have had a cultural renaissance in the past 10 to 15 years,” said Harlan Brownlee, president and CEO of ArtsKC. “The state of the arts is really pretty good. We are in a lot of top five and top 10 lists in comparisons among regions. People are spending more per capita than anticipated, and demand is higher.”
4. Downtown is coming back: Many major metro areas have already revived their downtowns. Kansas City’s downtown has been struggling to revived. Many projects put in place before 2008 are just now starting to bear fruit as Millennials are moving downtown and in turn new and innovative companies are moving downtown. So while the city is slow to catch up with other cities, right now is when we are starting to see it happen, so investors are getting in on the ground floor of the future Kansas City.
5. Everything is up to date in Kansas City: Again because of Google Fiber, we are getting a lot of new high tech start ups and PC Magazine named the city as one of the top cities for High Tech.
6. Everything is bigger in Kansas City: We have a lot of major corporations, names you probably have seen in the news or in stores . . . like Halmark, Russel Stover, Sprint, Burns & McDonald, Cerner, Garmin and many more.
7. It’s cheap here: Well not cheap, but Kansas City does have a very low cost of living compared to the national average. According to Forbes Magazine, Kansas City is more than 3% lower than the national average.
8. Slow and steady wins the race: If you look at housing you will see that our prices did not have huge growth before 2008 and when the housing market collapsed, we really didn’t see huge losses. So investment dollars in the Kansas City housing market, will be fairly steady as the region saw between 3% and 3.5% growth since 1975.
9. Affordable housing costs: If you look at the average house price in Kansas City you are looking at $160,000 on average and $105,500 at the median. However if you are looking in the rental markets that number goes down. You can purchase a house in Kansas City that is 100% move in ready and quite often already rented for anywhere from $20,000 and up. We feel the sweet spot in good working class neighborhoods is between $40,000 and $70,000, and you can find a very good supply of houses for your rental portfolio.
We invite you to take a good look at Kansas City. One of the best reports out there continues to be the Real Estate Report for Metropolitan Kansas City from Block Real Estate Services and if you want to drill down to the metro residential numbers you can visit the Kansas City Regional Association of Realtors for local stats.
Why do you invest in real estate? Please share your comments below.
Have a question about Kansas City, please ask away.