Rising Rents: The Reason and Rhyme
Just over a year and a half ago, the Kansas City Business Journal wrote a column on the rapidly growing rental rates in Kansas City. “Kansas City had the fourth-highest percentage increase in rental rates in January, according to Zillow.”
This column was written back in February 2015, so one can only imagine where in the universe the rental rates have skyrocketed to in the peak season of 2016.
In a market like the one we see today, people have two primary thoughts on their minds. Why the rents have raised exponentially? As well as, what is it that leads owners/developers to name the prices they do?
Rents On the Rise: The Reason
When the market collapsed in 2008, investors spent little time from 2008-2010 snatching up properties at low, low cost. This investment opportunity coincided well with locals who lost their homes to foreclosure and were forced to make the switch to renting.
The real estate market today has done a one-eighty in terms of buying and selling. Instead of foreclosures, people are selling their homes quicker then you can say “____”. In the Kansas City real estate market, homeowners looking to put their home up for sale, then take their sweet time looking for a place of their own, have another thing coming. There is a high demand for buyers out there and in this Sellers Market, homes are moving fast. Often times, these sellers have no other choice than to rent. They receive offers before they are able to find homes of their own to move into!
Not to mention, this isn’t 1945 anymore. Young men and women aren’t eager to find their “Levittown” suburban home. Instead, the urge to go out and buy a home of your own is much slower amongst millennials. This trend had led to an influx in locals renting much longer and more often before they decide to make the switch to home ownership. If you think about it, the millennial generation witnessed the housing bubble burst first hand without actually experiencing the feeling of home ownership. There may be some behind the caution the younger generation has towards buying/selling homes.
Rents On the Rise: The Rhyme
The other question people ask themselves when looking to rent is, why is it that this apartment costs $1800 and that apartment across the street costs $800. There are 3 primary factors to take into consideration with this: Location. Condition. Amenities.
Location plays a huge factor in Kansas City’s’ rental market. You can pay same rent for a 500 sq ft Studio apartment just a block from the Country Club Plaza as you would for a 2 bedroom 2 bathroom 1100 sq ft apartment North of the River. When it comes to renting in the metro, the square footage gets smaller, but the rent stays the same.
Condition is also something to take into consideration when understanding the price of an apartment. It may have said “updated kitchen” on the listing, but what does “updated” really look like. Well a few things to look for is neutral paint on the walls, tiled showers/tubs, hardwood floors, granite counter tops, and built in microwaves. Now, just because an apartment doesn’t have all of this, it doesn’t mean it isn’t in good condition. A well maintained apartment with less updated finishes/appliances will go far when it comes to investing your rent money!
Finally Amenities are big players when it comes to the price of an apartment! Amenities can be but are not limited to a gym, pool, game room, wine cellar, business center, massage therapists, and many more luxury additions that you find when renting at larger complexes. People sometimes forget that items such as off-street parking, W/D in unit, windows fixtures, new windows, utilities included, and professional management are included in items to consider when comparing amenities. Having a W/D in unit or a parking spot is not a given in apartments, especially in the KC metro, so when you find a place that includes such perks in your rent, you should consider how nice of a convenience that is for you to have in your new home!
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