Category Archives: Kansas City Real Estate

Appreciation versus Cash Flow

Here in the Kansas City real estate investing market the conversation turns time and time again to whether you should go for the long term stability of Johnson County, Kansas versus the higher cash flow returns of Jackson County, Missouri.  Yes, there are a couple other counties you may choose to invest in. Yet, these are the big two.

Johnson County, Kansas – Appreciation
Johnson County is the home to cities that constantly show up in the “most livable” reports of the different magazines and websites; Overland Park and Olathe.  Yet there are other cities of great import; Leawood, Lenexa, Merriam, Mission, Mission Hills, Shawnee, Gardner…to name a few.

What they all have in common is great school districts.  I think most of us who live in JoCo would rank the Big Three school districts in this order;

  1. Blue Valley
  2. Olathe
  3. Shawnee Mission

In the interest of full disclosure, I chose Olathe because I have two kids that had some special needs and Olathe was a far better choice. Blue Valley is an exceptional school district for the gifted and Shawnee Mission, though it has fallen on some tougher times, it time tested and continues to exceed when compared nationally.

Let me simplify real estate for you; home values are always strong and appreciate more based on the school district. 

Whether you are rich or poor, black, brown or white, muslim or Christian or agnostic, don’t we all want the best for our kids? Therefore, when you invest in Johnson County, KS rental property just know that because the home values will be higher and therefore the returns will be lower.  Sure, the rents are higher, too, though not 1:1.

All that is to say that yes, you should buy smart.  You should put enough money down so that you have positive cash flow.  Yes, you will have a lower cash on cash return and yes, you will outpace almost all other areas of the Kansas City metropolitan area in appreciation time and time again.  Johnson County is a proven economic engine.

Jackson County, Missouri – Cash Flow
Following the exact same arguments as above, because the school districts are widely considered “lessor” the home values tend to trail that of neighboring JoCo.  Sure, Lee’s Summit sometimes ranks in that “most livable” category with a good school district.  Yet, it continually stands alone.

And make no mistake, it’s not that Jackson County, Missouri is a bad place to hold income property.  Kansas City proper ranks as a great place for the young over and over again, and KC is home to the amenities that bind a city together; art museums, great parks, a revitalized downtown, the Chiefs, the Royals and the Kaufman Center.

Yet, per capita and per household income tends to track lower, the school districts rank lower and there wasn’t the community planning involved in the growth of the city in the early days like there was in JoCo.

Again, Jackson County is a great place to live.  And to invest.  You will get better cash flow.  Appreciation, for the most part, tracks at just above inflation though last year Kansas City was one of the highest appreciating cities in the country at 9%.

Appreciation versus Cash Flow
In general, with exceptions to the rule to be found, if you are looking for a higher cash flow return you will want to be looking in Jackson County, Missoui.  If you are looking for investment property and don’t need the cash flow to live on and can wait years until you retire from your profession as an engineer, doctor…whatever… you may find Johnson County, Kansas more desirable.

 

Leave a comment

Filed under Kansas City Real Estate, Real Estate Investing

Kansas City Real Estate Market Report

I thought some of you may enjoy catching up on the Kansas City real estate market report.  Simply click here to be taken to YouTube.

kansas city real estate investment property

Leave a comment

Filed under Kansas City Real Estate, Uncategorized

KW MAPS Coaching

So here is a fun fact; I am now a KW MAPS Coach.

Kansas city real estate investing

In addition to my duties as Broker/Owner of Ad Astra Realty, Inc ( a Kansas City property management company) I am also the Team Leader of Keller Williams Realty, Diamond Partners, Inc of Olathe, Kansas.  Those two positions are not new and many of you already knew that.

Recently, because of our success at building KW’s Olathe office, MAPS, an agent and leadership coaching company for Keller Williams, asked if I would also coach other Team Leaders for KW around the country. Sounded like fun, so here I am.

Real estate has been a very good business for me.  I want to thank all those who have provided this opportunity to me.  My thankfulness starts with each and every client that has entrusted me/us over the years to help them with their buying, selling and/or investment real estate needs here in the Greater Kansas City area.  My thankfulness also extends to;

  • My wife and family for all the time missed
  • Randy Lindemuth, my first broker at Scott Douglas Realty down in Tulsa
  • The staff, past and present, of Ad Astra Realty
  • Larry Kueser who offered me the position of Team Leader at KW
  • Dianna Kokoszka for offering the position of MAPS Coach to me
  • Mike Bastian for modeling what a coach can do for a real estate agent and team leader

There are so, so many people to thank.  We still stand ready to help you with any of your real estate investing needs here in Kansas City. We offer accountability, honesty and a sincere effort and professionalism to help you with your “Retirement worth having.”

Thank you everyone for everything you’ve done.  Ya’ll rock.

 

Leave a comment

Filed under Kansas City Real Estate, Misc. Real Estate, Personal Real Estate Opinions

2018 Kansas City Real Estate Investing Outlook

Hello All. Welcome to the New year.  Here is my 2018 Kansas City Real Estate Investing Outlook for both Sales and Property Management.

REAL ESTATE SALES: BUYING, SELLING, INVESTING

A Quick Look Back at 2017

Wow! What a year 2017 has been in the residential real estate world.  Here in the Kansas City area we’ve seen appreciation as high as 11% in Johnson County, KS and generally above 7% throughout the metropolitan area. It was not unusual for houses to be on the market less than 10 days if they were in good condition and priced right.

Looking Ahead in 2018 

Chris’ opinion about 2018?  It will closely follow 2017’s arch but it will be slightly more muted.  Listen, 11% appreciation is simply not sustainable in Kansas City over the long term. Housing affordability is becoming a worry even here in the middle of the country, interest rates are looking like they will tick up (though Chris has been thinking this for YEARS!) and until wages begin to catch up we will continue to decrease the amount of qualified first-time home buyers.

In conclusion, Chris thinks 2018 will be another great year for sellers, slightly better for buyers and another very good year to be a real estate agent.

PROPERTY MANAGEMENT

A Quick Look Back at 2017
The rental market continues to be very, very strong in Kansas.  However, on the Missouri side we began to see a slide in occupancy rates.

Kansas’ vacancy rates in Johnson County continue to hover at about 5%.  Missouri is creeping north of 8%. We have also noticed greater effort expended in finding the same standard of applicants as in the recent past.  This makes sense since so many of the buyers driving the sales side of the market are leaving the life of tenancy.

We have noticed that many of our tenants that experienced hardships in the Great Recession have rehabilitated their credit and are now buying.

Looking Ahead in 2018 
Tenants continue to rehab their credit and/or begin to look towards owning their own homes, especially in the Millennial Generation.  The nomadic life the Millennials have clung to is beginning to give way to the responsibilities of adult-hood and looking towards securing wealth and personal home ownership.

Chris won’t be surprised at all if vacancies continue their correction toward the historical number of 10%.  This will be a shock to the system of many investors who have entered the market since 2008.

 

Leave a comment

Filed under Kansas City Real Estate, Property Management, Real Estate Investing

2018 Housing Forecast

If you are looking to buy or sell real estate in the great state of Kansas in 2018 you may wish to watch this 3:44 minute video provided by Wichita State University.

Leave a comment

Filed under Kansas City Real Estate, Uncategorized

Is It Time To Evaluate Your Investment Property

The New Year is fast approaching and I have to ask; Is it time to evaluate your investment property?

Many of our clients purchased their rental properties during the Great Recession.  They bought low and now may be the time to sell high.  Or is it?

The very first thing you need to know in order to make an intelligent decision is to get a comparative market analysis of your income property.  Listen, it doesn’t have to be detailed.   But if you can be plus or minus 3%-5% you can have a good idea as to how to measure your future options.

  • Should I continue to hold because I’m making good money on my investment?
  • Should I 1030 Exchange myself in to fewer but more valuable income properties?
  • Should I sell, pay the tax and relax?

There are, of course, a few other options and variables not the least of which is “where are you in your life?”  What I am saying is that the real estate market in Kansas City has changed by leaps and bounds since 2009 and so may have your investment needs.

So, is it time to evaluate your investment properties?  If it is, give me a call at 913-568-1579.  I’d love to help.

5 Comments

Filed under 1031 Exchange, 4 Benefits of Real Estate Investing, Kansas City Real Estate, Real Estate Investing, Uncategorized

REALTOR Referrals for Kansas City Income Property

 income property referrals

Ad Astra Realty works with real estate investors every day.  We manage over $26,000,000 in assets here in Kansas City.  We know investment and income property.

We also know that many of our readers here at BBQ Capital are real estate agents. We just want you to know that we are happy to work with your real estate and property management referrals.  You can read our Realtor Referrals web page to find out more.

Leave a comment

Filed under Investment Property, Kansas City Real Estate