Kansas City is in a Major Housing Crunch!

Ask any homebuyer or realtor in Kansas City, and they will tell you the same thing: there is a serious lack of inventory in the metro right now. Homes under $250k are flying off the market faster than people can get their offers in, and buyers are scrambling to lock in deals before they’re gone. Bidding wars and over-asking purchase prices are the norm, which is great for sellers but not so good for the buyers.

But what does it mean for investors?

Well, mostly it just means that deals are going to be a little bit harder to come by than they were even just a couple of years ago. It also means that investors are going to have to get a bit more creative in their property scouting methods, or they’re going to settle for being satisfied with their current situation, whether they’re invested in one, five, or zero properties.

Causes for the Housing Crunch

There are a few contributing factors to the current housing situation in Kansas City. The biggest one is that the city is growing faster than it can produce homes for new residents. The metro added close to 100,000 new residents in the last decade, and with the slowdown in new homes being built due to the recession, there just isn’t the inventory to accommodate the ever-growing population. Even though permits for new homes have increased in recent years, they’re still not at pre-recession levels. Another factor is that current homeowners are often hesitant to list their properties, because there’s no certainty they’ll be able to find another house that suits them. This reluctance to sell only compounds the “crunch” problem.

Investing in this Environment

For investors looking to get a foothold in the Kansas City area, it can be tough. Supply is not nearly enough to handle the demand, and basic economics tells us that prices go up when demand exceeds supply. And that’s exactly what’s happening in KC. It’s not uncommon for multiple offers to come in the day a house hits the market, which drives the price up and ultimately knocks some folks out of the game.

This presents a unique challenge for investors on the lookout for great property deals. On the one hand, they want to get in on the game and start generating some positive cashflow. But on the other, their profits will take a hit if they have to pay thousands of dollars more than they had planned.

One piece of advice I would give to investors operating in this sort of climate is to turn up their scouting efforts, hitting every area they can think of to find deals. Sites like Craigslist, newspaper ads, social media, driving for dollars, even approaching homeowners who don’t have their property listed - all of these can generate leads that may turn into something more concrete.

Or there’s another option....

Turnkey is the Best Choice

Partnering with a turnkey investment company like USREEB eliminates much of the stress investors have to deal with - especially in a tight seller’s market like KC. Because we already have a large inventory of properties for sale, many of which are already tenanted and cashflowing, you don’t have to spend the time and effort scouting properties and haggling over the price. You’re also not in competition with hundreds of other buyers all vying for the same property. It’s a simplified, streamlined process that connects great rental homes with both veteran and new investors - without all the hassle.

I will talk up the merits of turnkey investing all day, every day - if you’ve read this blog before, you already know that. But right now the timing couldn’t be more perfect for this type of investing. When the market is as hot as it is right now in Kansas City, with low inventory and lots of buyers, turnkey investing is really the best way to nab a great property at a great price.