Kansas City Area

[Daniel Highsmith]

I'm starting to research the Kansas City area for SFRs and Multi-family. I'm looking for a B class neighborhoods. Can anyone point me to the right zip codes to start researching? From what i've heard, I need to stay on the Missouri side and not the Kansas side.

[Chris Dawson]

@Daniel Highsmith, the Kansas side has lots of great areas to invest in, but there are generally 2 reasons that make the Missouri side more attractive:

1) Taxes are lower in Missouri.  The average effective tax rate in Missouri is .99%.  In Kansas it is 1.4%.  So, for the same property price and rent amount, you will cash flow less in Kansas than in Missouri.

2) Regulations - Missouri is way more investor friendly than Kansas.  For example, in Kansas City, MO, you are required to register your rental property with the city.  In Overland Park, KS you have to do this PLUS you have to have an inspection every 2 years AND you have to pay $60 for this privilege.  Now I will say that Independence, MO just passed a new registration requirement that is similar to Overland Park, but it has not gone into effect yet. 

There are more, small cities on the Kansas side than on the Missouri side, and each city has its own building and code regulations.  For example, in KC MO, you can do anything you want to the inside of your property, whereas in Overland Park, KS, you have to pull permits for almost everything.  Not only does this raise your rehab costs, but it will also almost certainly cause delays.  

Hope this helps.