What can we say about Kansas City and how to navigate its growing real estate and rental markets?
With a rising population, revitalized neighborhoods, and a relatively low cost of living, Kansas City’s real estate and rental markets have drawn attention from homebuyers, investors, and renters. The rise of remote work has sent more and more tenants to mid-size cities like ours, where they’re spending less for a higher quality of life. Retirees are choosing to live a low-maintenance life in rental properties here. Families and professionals are moving into the area because of great schools and attractive housing.
As the city continues to expand and evolve, understanding the trends shaping the local housing landscape is more important than ever. Whether you’re a first-time buyer, a local investor, or someone from out-of-state looking to diversify their portfolio, there are some great ways to maximize the return you earn on your investments here.
Rents are rising and so is demand. Vacancy levels are low. Let’s take a look at what that means for you, and how you can position yourself for profit.
Consider Your Prospective Kansas City Tenants
Investors looking at potential properties and ways to maximize their ROI will want to consider the type of property they buy and the location. Think like a tenant. While real estate investing is an excellent way to build long-term wealth, you have to invest in the right property.
This comes down to understanding your potential rental value and your potential tenants.
You’ll find tenants in Kansas City and the surrounding suburbs who are students, professionals, families, and retirees. The best place to buy will be a neighborhood that attracts a lot of these diverse demographics. It may be in a great school district or close to commuter routes.
When you’re choosing the neighborhood to invest in, make sure you’re thinking about your likely tenants. Rehab properties can be tempting because they come with a lower price tag. However, the more work you have to put in, the longer you have to wait before you can list the home, find a tenant, and start collecting rent. Look for a property that’s as close as possible to move-in ready. If you only have a few cosmetic upgrades and updates to make, you’ll start earning faster.
Prioritize Renovations and Updates: Be Willing to Invest in Your Investment
Let’s talk about how to maximize earnings and ROI in a property you already own.
Well-qualified tenants are often drawn to properties that are aesthetically pleasing and in good condition. You don’t have to be an expert to understand that well-maintained homes are always going to earn more than those that are deteriorating or not in great shape.
We want you to prioritize maintenance, but we also think it’s important to consider ongoing renovations and updates as the market shifts and tenant demands become more nuanced. Ten years ago, a fresh coat of paint and some clean carpet was enough during a turnover. Today, tenants are looking for smart home technology, energy-efficient appliances, attractive landscaping, and LED lights.
They want convenience such as online rental payments. They’re looking for pet-friendly properties and included washers & dryers.
If you can attract high-quality tenants, they’re more likely to be willing to pay higher rent and stay for a longer period of time, which will increase your ROI.
Making Smart Rental Increases
It’s pretty obvious – to maximize ROI, you need to bring in more rent.
Raising rent is one of the most effective ways to increase the ROI on your rental property. However, it’s important not to overcharge tenants, or they may look for a more affordable option. To avoid this, it’s recommended to research the local Kansas City rental market and assess the market value of your property. If you find that the market rent is higher than what you’re currently charging, you can gradually increase rent.
Reliable market data is more important than ever. A Kansas City property management expert will have that data. We can share with you our insights and analytics, which are constantly coming in. This is what helps us to price properties accurately and competitively before we list them. More importantly, it helps us plan for the right renewal rate when we’re negotiating the rental contract with a tenant we’re hoping to keep in place.
If you want to maximize your ROI, be smart with your rental rates and increases. You do want to maximize what you earn, but not at the risk of a longer vacancy or an expensive tenant turnover.
Earn More by Lowering Your Rental Property Expenses
To earn more, you have to spend less. So, increasing ROI is by lowering expenses associated with your rental property. You might find ways to cut down on maintenance costs without sacrificing the condition and value of your investment.
- Look for new vendors or invest more heavily in preventative maintenance in order to avoid those costly emergency repairs. Finding vendors and service professionals is more challenging than ever because they’re busy and they’re charging more. A property management relationship can help; we have existing relationships in place with the best vendors in Kansas City.
- You can reduce utility bills by upgrading your systems, paying attention to HVAC servicing, and investing in technology.
- Focus on tenant retention so you can avoid turnover and vacancy loss. This will have a dramatic impact on your ROI.
- Modernize your systems so you’re not losing time, money, or potential on mistakes and wasted time.
Working with a Kansas City property manager is potentially the best secret weapon when it comes to earning more and spending less on your investment property. Let’s talk about the Kansas City rental market as it pertains to you and your investment properties. Contact us at Key Partners Property Management.
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