Kansas or Missouri? Where to Invest

Kansas City is a wildly diversified city, economically speaking.  I have written in the past about the differences between Kansas and Missouri.  And it’s worth the read if you are not familiar with the area.  But time and time again I need to let out of state investors know that there is and should be an expectations difference when it comes to investing in real estate in either Kansas City, Missouri and it’s Missouri suburbs or the suburbs on the Kansas side.

Missouri real estate investors should expect slightly lower entry points, price wise, for the comparable properties on the Kansas side as well as a little higher cash flow, cash on cash returns, etc.  But appreciation on the MO side usually lags behind the Kansas side.

The Kansas side usually has a little higher prices and the returns are slightly lower on the cash flow side.  But in general, it is EXPECTED that you’ll have great appreciable growth as time goes on.

Why?

School districts.  The Kansas side has the better schools, by in large.  Especially in Johnson County, Kansas.  Lee’s Summit and Blue Springs on the Missouri side are pretty darned good, too, and therefore their prices are a little higher and returns a little lower when you compare them to other Kansas City, MO suburbs.

It’s really very complicated to select the right areas for your Kansas City investment property.  So much goes in to picking the right rental house;

  • What return do you expect?
  • What kind of house (multi family, single family, ranch, etc) do you want?
  • What kind of tenant are you after?
  • What price point are you looking to be in?
  • Cash flow or appreciation?  A mix of both?

I could go on and on.  Just make sure you understand the pluses and minuses of each side of the state line.  Both are great states.  You just need to know what you are getting in to and where you are getting in to it.  🙂

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Filed under Investment Property, Kansas City, Kansas City neighborhoods

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