The first thing you need to know about Kansas City is that it's in Missouri - unless it's not. Yes, it confuses outsiders, but locals seem to handily deal with the fact that the city spills across the Missouri River into, of all places, the state of Kansas.
A little known fact about Kansas City is that it has produced some incredible talents. Walt Disney launched his first company here. It was also home to Amelia Earhart, Earnest Hemingway and Joyce Hall (founder of Hallmark Cards). Each one left a mark on the city, and museums celebrating their work draw tourists. Perhaps something in the air inspires creativity. Although jazz great Charley Parker was born on the other side of the river, he grew up on the Missouri side and, in fact, contributed to the introduction of bebop, placing Kansas City on the map as a serious jazz mecca. In his days, locals and visitors partied the night away in area jazz clubs. It's a legacy that survived, as evidenced by the number live music clubs in the city today.
There is a serious side to Kansas City, however. The largest employer is the federal government. Nearly 150 agencies have branches here, including an office of the IRS and a Federal Reserve Bank headquarters. Several private companies also call Kansas City home, including Hallmark, Russell Stover Candies, and H&R Block. The presence of large employers is an indicator of future development in the area. Indeed, only the 1980 census marked a decline in population. Otherwise, Kansas City has had continual growth since Lewis and Clark noted it as an ideal location for a fort. As of 2015, estimates put the population at 470,000.
Similar to other Midwestern towns, the Kansas City urban center is experiencing rejuvenation, with the Power & Light District as a quintessential example of redevelopment. It's a vibey entertainment and dining area attracting residents to downtown housing. Fortunately, violent crime in the downtown and midtown areas is lower than average.
City life often revolves around meals, right? With the 150-year-old City Market still supplying fresh produce to local chefs, it's easy to find good food. Kansas City is home to several James Beard award winners, such as Megan and Colby Garrelts' restaurant, Bluestem. Of course, this city's food culture is mainly about the barbeque. Kansas City-style barbecue is an experience that draws folks from around the globe. Ask any local and they'll recommend their favorite.
So what's the drawback? The weather is subject to swings and spikes year-round. Winters are snowy and summers are hot, though not especially humid. But with the bonus of a low cost of living, even the snow seems more tolerable here in the City of Fountains.
Q2 2015 Kansas City Rental Market Update
In Q2 2015, Kansas City was the fifth-best rental market in the Midwest and 35th-best in the country as a whole. Since Q1 2015, Kansas City jumped five spots in the Rental Ranking Report's regional rankings for the Midwestern U.S. and eight spots in the national rankings.
If rental price appreciation was the only metric rental property owners cared about, Kansas City would look like a very poor market to invest in. Kansas City had a dismal year-over-year rental price appreciation of just 0.93 percent in Q2 2015, which was one of the lowest such increases in the country and around 80 percent under the national average for that metric during that period.
However, rental price increases are not all rental property owners care about. Kansas City's moderately high annual property value appreciation of 5.11 percent in Q2 2015, which was slightly above the national average during that period, served to supplement the rental incomes of local property owners by boosting the value of their investments. Furthermore, the capitalization rate, a metric that compares annual rents to property values that is commonly used by investors to gauge the attractiveness of rental properties, was an impressive 8.23 percent in Q2 2015 for Kansas City rental real estate - about 21 percent higher than the national average during that period. The low local vacancy rate of 5.00 percent and decent annual job growth rate of 1.71 percent highlight the fact that demand for Kansas City housing is high and will likely remain that way for quarters to come.
What data is this Rental Ranking Report based on?
To calculate the statistics found in the Q2 2015 Rental Ranking Report, All Property Management gathered data, including the most recent government housing and jobs data, for 75 metros across the United States. Specifically, we looked at home vacancy, capitalization, home value appreciation and job growth rates, changes in rental prices, and the average number of days properties have been on the market to determine which U.S. metros will give investors the highest returns on rental investments. Click here to learn more about the Rental Ranking metrics.
Should I invest in Kansas City rental property?
Thinking about renting out a property in Kansas City? Save time, avoid hassle and maximize your rental income by having a professional property management company operate your rental property for you. Click here to get a free quote from a local property manager or call 877-780-4510 to have the All Property Management staff get quotes for you.
All Property Management specializes in connecting rental property owners with professional property managers in communities across the United States. These property managers help set rental rates, advertise properties, screen and manage tenants, collect rent, manage vendor relationships and ensure compliance with local, state and federal housing regulations. They take the hassle and worry out of managing rental properties - all while maximizing rental property owners' rental incomes.