We love Single Family Rental Homes as investments! Investing in Kansas City rental properties provides a lot of options, whether you’re looking to buy your first home or adding to an already successful investment portfolio.
Single-family homes are particularly good investments in the current market, and today we’re telling you why we love them.
Single-Family Homes Reflect Kansas City Demographics
Demographic changes favor single-family homes in the Kansas City rental market. These properties are the fastest growing segment of the U.S. housing market, and we don’t think that this trend is going to slow down any time soon.
People enjoy renting single-family homes because they allow for space, privacy, and access to safe, established neighborhoods that are family-friendly and usually in good school districts. People rent these homes because they want to live in a house but they don’t want to maintain a house. They prefer maintaining a flexible lifestyle where they can easily move if they need to for job changes and financial factors.
When you invest in single-family homes, you’re ensuring that your tenant pool will be strong for many years to come.
Single-family Rental Homes Have High Returns
Cash flow is easily achieved with single-family properties because they usually rent for more money than multi-family homes or apartment units. Rents have increased steadily for more than a decade. In Kansas City’s rental market, the rental values of homes remained fairly steady and even grew during the housing crisis of the late 2000s. This is significant for investors who want to count on positive cash flow.
The returns are also more reliable than what you’d achieve on the stock market.
According to our research, single-family rental homes have provided great returns (8% annual average) with much less volatility than traditional financial markets. This data dates back to 1992, so the returns have been consistent and reliable.
Homeownership is Less Attractive to Tenants
To buy a home, people need a down payment and they need to pass strict credit checks. Additional money is needed for taxes and insurance and maintenance. This is unappealing to many people who are currently in the rental market but might have otherwise been expected to buy a home.
For many tenants, renting is more affordable than buying. This rise in home ownership costs help you as an investor, especially if you’re renting out a single-family home. Studies show that monthly home ownership costs were up 14 percent in July 2018 over the same period in 2017. Rental costs for the same period were only up 4 percent. Your single-family home will be attractive to good tenants because it’s the type of property they want to live in. They simply want to rent it instead of buy it.
Kansas City Tenant Retention
We also love single-family homes because they contribute to higher tenant retention rates. Tenants in single-family homes tend to be older and better educated than the tenants who rent apartments. This creates more stability and contributes to those tenants taking better care of the properties.
We can help you find and manage a single-family home in the Kansas City rental market. Contact us at Key Partners Property Management for more information.