Today I want to look at investing in real estate here in Johnson County, Kansas. For those of you who are from out of the area, Johnson County, Kansas is a suburban area of Kansas City, MO. Within the county are two of the Top 20 Cities in America to live in: Olathe and Overland Park. (I live in Olathe.)
There are other great cities, too. Like Lenexa and Shawnee and Merriam. But I digress. Looking over our MLS of homes for sale I am consistently finding that the better value buys are in single family homes at this time and not duplexes or more.
Duplexes for Sale
At this very moment in time our Kansas City MLS shows 51 duplexes for sale in Johnson County, Kansas. I’ve been through and awful lot of them and I can tell you there are not 4 I would recommend at this time based on their current asking prices. While inventories are up on duplexes reality has yet to set in on some of the sellers. They still want rent to price ratios from a few years ago. Unfortunately the properties haven’t been taken care of since a few years ago. :)
Single Family Homes for Sale
The same kind of delusion that some duplex sellers have is also true with many sellers of single family homes. Though they are not generally owned by investors and therefore do not have to know better. But because of the sheer volume of houses for sale there are quite a few buys out there to cherry pick.
Now, as we’ve discussed many times the disadvantage to purchasing a single family home as an investment property is it will most likely need some repairs so you’ll need to have not only the cash to purchase (in JoCo figure about 20%-25% down) but you’ll likely need another 5%-10% to bring the property up to date…rental wise. Another aspect is that you’ll probably need anywhere from 60-75 days after closing to get the repairs done and get a tenant in. So that’s a mortgage, maybe two, you’ll have to pay without any income.
The flip side? You can buy these homes significantly under value compared to CURRENT comps in their neighborhoods. And these homes are in neighborhoods with traditional growth and desireability.