As a real estate investor, you have a lot of options to choose from in Kansas City, MO, so how do you choose your next investment? Here are 6 things to look for in your Kansas City investment property.
Affordability
Before diving into real estate investment, it’s crucial to assess the affordability of the property. Whether you’re making a cash purchase or seeking a loan, the initial cost must be within your financial reach. For cash transactions, ensure you have enough funds for the purchase price, closing costs, and any additional fees like association or transfer fees. Also, consider budgeting for association fees if there is a homeowners’ association, especially if rental income won’t be immediate. For financed purchases, research lenders willing to finance investment properties, bearing in mind that securing a loan for vacant land may pose more challenges than for residential buildings.
Demand
When considering an investment property in Kansas City, it’s crucial to assess the demand in the market. For rental properties, ensure that the market is not oversaturated with available rentals. If it is, you may need to offer competitive rental rates to attract tenants quickly. Compare the rental rates in Kansas City with other areas to gauge demand. Higher rental rates indicate a strong demand and a desirable location, potentially justifying a higher investment. It’s essential to aim for rental income at or above market rates to ensure a stable return on investment.
Curb Appeal
When considering an investment property in Kansas City, don’t overlook the importance of curb appeal. A well-maintained and visually appealing property is more likely to attract tenants or buyers. Ensure the property is clean, well-kept, and inviting. Fresh paint and landscaping can make a significant difference in the property’s overall appeal. Investing in a property that already has good curb appeal can save you money and effort. If not, be prepared to allocate additional funds to enhance the property’s appearance.
Structural Issues
When considering an investment property in Kansas City, it’s crucial to pay close attention to the property’s structure. An inspector plays a key role in this process, equipped with the necessary tools to pinpoint any potential structural concerns. If you’re financing the purchase with a loan, the lender will typically mandate an inspection to ensure the property is sound before approving the loan.
Special Features
When searching for an investment property in Kansas City, it’s essential to consider unique features that set the property apart. Whether it’s a charming waterfall cascading into the pool, a creative dry bar made from a repurposed table, or a delightful cluster of fruit trees on the premises, these special elements can capture the hearts of prospective tenants or buyers, making them envision the property as their own.
Exit Strategy
When considering an investment property in Kansas City, having a solid exit strategy is crucial. It’s essential to anticipate future trends by studying the market carefully. Be mindful of any potential shifts in population or property values. If there’s a significant migration out of the area, it may be wise to divest. A decrease in market rent could indicate the need for a strategic exit. Similarly, declining property values might prompt you to consider selling. On the other hand, if you find the property personally appealing, it could serve as a future retirement option!