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Investor Insight for the Kansas City Apartment Market

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Apartment Loans Kansas CityKansas City offers an attractive apartment market for real estate investors. When the Covid-19 pandemic severely impacted a large number of communities in 2020, Kansas City was among the top communities in the country that continued to thrive. Direct Apartment Lenders provides some investor insight for the Kansas City, Missouri apartment market.


Living in Kansas City, MO

Known as the Show Me state, Missouri is projected to become one of the top investment property markets in the years ahead. 

Kansas City has affordable housing options for its residents.

Residents and visitors enjoy dining out and relaxing in local coffee shops.

Many people adore barbecue that is made in Kansas City, as the area is home to some of the top restaurants in the United States.

Historic venues are popular places to visit, too. People frequently visit local museums, arts galleries and historic parks in Kansas City. 

With a thriving job market, low unemployment and many wholesome activities, living in Kansas City, Missouri is quite enjoyable for active couples, folks who are single and for growing families.

Sports fans enjoy watching the Kansas City Royals baseball team and the World Champion Kansas City Chiefs football team. 

Kansas City also has four riverboat casinos. where residents and tourists can experience quality entertainment and fine dining.

There are plenty of activities for residents who live in Kansas City to enjoy. 

About Apartment Rental Rates in Kansas City, Missouri

According to Zumper, the median rental rate for a one-bedroom apartment in Kansas City is $950 per month.

Two-bedroom apartments rent for an average rate of $1,150 per month.

Affordable apartments are among the top reasons that residents are deciding to live in Kansas City. This is good news for real estate investors as well. When the average apartment rental rate consumes a lower portion of a tenant’s take home pay, more money may be allocated toward savings -- which should lead to timely rental payments from a large percentage of tenants.

Apartment rental rates have increased three percent, when compared to year-over-year rental rates in Kansas City, MO.

Rental rates have grown by almost 9.2 percent in Kansas City over the past three years.

Consistent rent increases that are still affordable for the marketplace should continue to attract motivated real estate investors to the area.

Statistical Data for Kansas City

Zumper also reports that 45 percent of the housing units in Kansas City are occupied by renters.

The Census Bureau reported that Kansas City had an estimated population of 495,327 on July 1, 2019. The population increased 7.7 percent from April 1, 2010, when the population was 459,787.

Median household income in Kansas City, MO was $54,194 in 2019.

According to the U.S. Bureau of Labor Statistics, the Kansas City market has an unemployment rate of 4.2 percent as of March 2021. This is great news as the average unemployment rate in the United States stood at 6.1 percent. 

With an unemployment rate that is nearly two percent lower than the national average, competitive wages and modest rental rate increases, Kansas City appears to have some attractive fundamentals for apartment investors. 

Multifamily Property Data for Kansas City, MO

Among robust cities that endured setbacks from Covid-19, the Kansas City multifamily market was able to soar at a faster pace than larger metro areas.

Sales volume for more than 5,600 multifamily units totaled $471 million through October 2020.  

There were also 4,274 new units under construction. Most of the newer apartment units were aimed toward the high-income rental market.

The average sales price per unit in 2020 was $75,600.

The Kansas City market had a cap rate of 5.2 percent as of the fourth quarter of 2020.

Outlook for the Kansas City Apartment Market

If interest rates are contained, the cap rates should trend lower. 

According to NorthMarq, investment activity began to increase after the second quarter of 2020, and the momentum for the Kansas City apartment market is expected to continue. The report also highlights growth in submarkets, such as Overland Park and Downtown.

Applying for an Apartment Loan in Kansas City, MO

A mortgage loan approval from a recognized commercial property lender could be a valuable asset for an investor who needs a bargaining chip during a bidding war.

Instead of visiting local banks to procure financing for an apartment building or for an apartment complex, self-employed borrowers and apartment investors can discuss the deal with a nationwide apartment lender.

We specialize in expedited funding support for investors who are prepared to submit minimal documentation for an apartment loan. 

For income-producing properties that align with our underwriting guidelines, we can close time-sensitive transactions within six weeks versus three or more months that many financial institutions need to fund multimillion dollar apartment loans.

Direct Apartment Lenders has in-house underwriters with years of experience in the complex field of apartment lending.

Contact us today to speak with a loan officer about commercial funding strategies in Kansas City or about our nationwide apartment lending services.


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