What Does The Apartment Boom in KC Mean For Investors?

Kansas City is currently in a period of amazing growth – the economy, population, job market, and the housing market have been climbing steadily for awhile now, with no sign of stopping in the near future. In response, area builders have been busy erecting apartment buildings in the city’s core and surrounding suburbs to accommodate the growth. This is great news for the city, right? Absolutely! It’s also good news for those who own the apartment buildings…but what about investors who have chosen single-family homes as their investment medium? What does this boom in apartment buildings mean for them?

Rest easy, single-family investors. Even with all the new apartments popping up – about 3,000 just in the city’s core alone, to be exact – there is definitely still a sizable portion of local renters who prefer a house over an apartment. There are lots of reason for this; in fact, there is a whole host of benefits that come with house living versus apartment living. For example:

• More privacy
• Larger living space
• No shared walls (or ceilings or floors)
• Outdoor living opportunities
• Great for people with children
• Easier to have pets
• Better parking

And these are just a few of the perks. Here’s another factor for single-family property investors to consider. All those millennials – who make up a sizable segment of the renter population – are growing up, getting married, and having kids. For many, this will mean they’ll be more interested in a house instead of an apartment. However, just because they’re interested in a house doesn’t mean they necessarily want to buy one themselves, or even that they can. Many millennials simply are not in the position to buy a house, whether it’s because they don’t yet have enough capital saved up or they’re dealing with sky-high student loans and other debts. Even for those that could secure a mortgage, many don’t want the responsibility that comes with homeownership. Dealing with taxes, insurance, and all the other “extras” that come with owning a home is simply unappealing to a large number of folks.

So, just because there are new apartment developments popping up right and left in KC, it doesn’t mean that you need to be concerned about whether or not you’ll find a tenant for your single-family property. With around 35% of the metro’s area currently renting and occupancy rates standing at 95%, there is clearly no shortage of people who are looking for a place to rent. Combine that with the unique benefits that only a single-family home can provide, and your chances of experiencing a vacancy are reduced even more.
Fear not, single-family investors. There may be an apartment boom taking place in Kansas City, but the market is rife with opportunity for ALL real estate investors, and this is projected to grow even more in the coming months.