It's official Kansas City was rated as one of the cheapest places to rent in the Nation.
http://www.forbes.com/2008/01/07/rentals-US-expensive-forbeslife-cx_mw_0107realestate.html
www.Frobes.com is reporting the latest results of the Marcus & Millichap report.
"Despite the low rents, Kansas City's has only a 5.7% vacancy rate. according to the report renters should expect to pay only 3% more this year because new construction will be flat. There were only 1,200 new rental units on the market this year. By the end of 2008, that number is expected to drop to 500, based on estimates from Marcus & Millichap."
America's Most Expensive Communities for Rent
1. New York, N.Y.
2. San Francisco, Calif.
3. Boston, Mass.
4. San Jose, Calif.
5. Los Angeles, Calif.
America's Least Expensive Communities for Rent
1. Columbus, Ohio
2. Indianapolis, Ind.
3. Kansas City, Mo.
4. San Antonio, Texas
5. Cincinnati, Ohio
I can tell you there are several reasons for this, as the areas top property management company we know the Kansas City market, we also know the good, the bad and the ugly.
The Good:
- Kansas City has unbelievably cheap real estate, some of my investors are finding homes for as little as $2,000, replace the plumbing with Pex, throw down some carpet, add some paint and we can get you $450 a month.
- Many Kansas City suburbs offer never before seen investment opportunities, Lee's Summit, Raytown, Independence and some other local towns have seen massive devaluation due to the huge number of foreclosures.
- Communities like Gardner, KS offer huge future potential. Follow the link: http://www.turnkeyproperties.org/resources_details.php?id_art=73191&img_id=0
- As more people move into foreclosure, they will be forced to rent.
- Ten years is typically the standard for someone who has faced foreclosure to get back on track and start planning to move toward home ownership again.
- Many of these folks in foreclosure are good people, who will make ideal tenants, they just got into stupid loans and lost their home.
- Buy low, sell high! That old axiom has never been more timely. While there is a glut of homes on the market, you can often name your price. Buy now, rent and when the market comes back sell and reap the profit.
The Bad
- While certain areas may bring respectable rent amounts, most of Kansas City is so rife with crime that no-one who can afford to move to the suburbs is willing to stay. http://www.crimereports.com/map/index/?search=+Kansas%20City+MO
- Kansas City has it's own 1% earnings tax on all residents, or at least the ones that work.
- The Schools SUCK! They've been put into receivership, taken over by the state, had their accreditation removed and yet the residents keep electing the same morons to run the school district.
- The city and the current mayor seek to punish investment in the City. Attacking landlords, deriding out of town investors and "absentee owners", they even tried to eliminate the notification of codes violations allowing the city to impose fines, without giving home owners time to make repairs.
- The Housing Authority of Kansas City is a colossal, glittering jewel of incompetence.
That's the Bad, Here's the Ugly:
- Real estate scammers and con artists have over-inflated values and bankrupted hundreds of investors, while this is not limited to Kansas City it has taken it's toll
- Vacant homes are stripped, devalued and destroyed.
So is Kansas City a good investment strategy? The answer is complicated, but you should consult a property manager for your answer. Get your investment property evaluated by a qualified property manager who knows the market. Don't trust your buyer's agent, they get paid to sell you something, pay a few hundred bucks and save yourself tens of thousands.
The reality is that most two bedrooms in KC will not bring more than $450 a month, we manage several that simply won't bring even $400. The suburbs offer much higher rents and much shorter vacancy times, because people actually want to live there!
If you can buy really low in KC, you can deal with the political anarchy, the taxes, failing schools and the crime. If you don't want to deal with those hassles look to the suburban Kansas City market.
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