Owning investment property is markedly better when the rental markets are strong. And that is where we are right now in Kansas City. I thought I would share a few observations that I have about our current investment property and rental markets.
- Prices for Rehab-to-Rent homes are on the uptick. Not a good thing. If this continues the real bargains on single family homes for income property purposes probably has a window of another 6-12 months for great cash on cash returns.
- Cash on cash returns on Rehab-to-Rent homes are down about 1%-2% in the last 6 months. In our core service area, returns are now hovering in the 11%-12% range.
- Johnson County, Kansas rental market is on fire! We have some vacancies that are over before our listings even syndicate.
- Bell curve income property in Olathe is renting in the $1,400 – $1,750 range all day long.
- Competition is way up for Rehab-to-Rent homes on the Missouri side in the $45,000 – $55,000 “all in” price range.
Buy while you can. Some day this will get more expensive. And that day is coming sooner than later here in KC.