MARKET BREAKDOWN
REGIONAL SPOTLIGHT: KANSAS CITY
ing [the study population] to Millennials at least 20 years old in 2014 and likely to be potential homebuyers.”
“For me, there are five key areas in KCMO, and they are not so much the city but the outer suburbs,” observed Santarelli. He cited Independence, Grandview, Raytown, Lee’s Summit, and Blue Springs as the top neighborhoods on his list for acquiring properties to renovate either for retail sale or to turnkey investors. Think Realty coach and executive vice president Ben Rao also invests in Lee’s Summit, both buying-and-holding and buying-and-flipping. In keeping with the area’s reputation for business incubation, Rao also recently began developing an entrepreneurial incubator and associated event space in the build- ing formerly home to the downtown Lee’s Summit post office. “There are so many ways to evolve in this market and use different strategies on the real estate side,” he said of his projects.
Also of note, HomeUnion recently ranked Overland Park, a submarket of Kansas City in the state of Kansas, seventh in its “Top 20 ZIP Codes with the Highest Real Estate Returns.” The real estate management firm cited and annualized total return of 6.2 percent for the 66223 ZIP code. The study based that ranking five-year projections for cash flow and appreciation in the local single-family residential market. “It’s simple why I like Kansas City and the surrounding area so much,” said Santarelli. “We find good inventory there; the numbers make sense, and the neighborhoods are very sound.” •
KANSAS CITY STRATEGY As withmost markets, your real estate in- vesting success in Kansas City will rely largely on your ability to find good deals on prop- erties that meet your strategic requirements. Fortunately for investors hoping to enter this market, the financial barrier to entry is still relatively low and the market allows for a variety of investment strategies, including making use of the Kansas City Land Bank (see p. 50 for details on this strategy). As we noted earlier, the Kansas City metro area is unusually large, which neces- sitates investors examine neighborhoods and other local delineations carefully before opting for one strategy over another.
KCMO AT A GLANCE
Mid-America Association of Real Estate Investors (MAREI) www.marei.org American Rental Property Owners and Landlords Association (ARPOLA) http://arpola.org/ Greater Kansas City Chamber of Commerce https://www.kcchamber.com/ Kansas City Convention Center https://kcconvention.com/ Kansas City Official Website www.KCMO.gov
Carole VanSickle Ellis is the editor of Think Realty Magazine. She can be reached at cellis@thinkrealty.com.
ATTOM Data Solutions www.attomdata.com (800) 550-4802
CLOSE THE GAP BETWEEN TIME & MONEY.
THE AFFORDABILITY FACTOR Of course, as is frequently the case when an area starts to grow and real estate appreciates rapidly, housing affordability becomes an issue for some residents. There are murmurings of this in some local me- dia publications already. So far, however, Kansas City seems to be largely withstand- ing the “affordability crisis” affecting most major metro areas in the United States today. While Kansas City home values are certainly rising, “Kansas City is still one of
the most affordable markets in the coun- try,” observed Santarelli. He added, “The last two years the mar- ket has appreciated more, measurably, than its long-term average. While that is fine, I do watch that sort of trend closely because it can herald an area becoming unaffordable.” Even in the event that owning a home in Kansas City does become less affordable and homeownership increasingly attrac- tive, turnkey rental owners and landlords
will likely still have plenty of potential renters to choose from. At present, the metro area is swiftly building a population of renters who are, as a generation, more inclined than any other to prefer renting over buying: Millennials. According to ATTOM Data, Kansas City is the fifth-best market for Millen- nial single-family rentals with an annual gross rental yield of 11.2 percent. In that report, Millennials were defined as “any- one born between 1979 and 1994, limit-
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