Kansas City, MO, is an attractive and rapidly growing rental market in the Midwest, offering affordable housing, a strong job market, and a thriving cultural scene. With steady population growth, an expanding economy, and increasing rental demand, the city presents an excellent opportunity for real estate investors.
However, as new housing supply enters the market, landlords should remain aware that rent growth is expected to moderate slightly in 2025. Strategic investing in the right neighborhoods and property types could be key to maximizing long-term returns.
Whether you’re investing in long-term rentals, short-term stays, or coliving models like PadSplit, selecting the right neighborhood and rental strategy is essential.
Why Kansas City is a strong rental market
Kansas City’s rental market continues to grow, offering opportunities for landlords who can meet shifting demand. The city attracts a diverse mix of young professionals, students, remote workers, and blue-collar employees looking for affordable housing and a high quality of life.
Compared to other major U.S. metros, Kansas City offers one of the lowest costs of living, making it a prime destination for renters relocating from higher-cost cities. However, home prices have steadily increased in recent years, pushing more people into the rental market. More than 40% of households in the Kansas City metro area rent, highlighting affordability challenges and the growing need for rental housing.
With an expanding economy and steady in-migration, Kansas City remains a landlord-friendly market. Investors can capitalize on high demand for affordable rentals, and coliving models like PadSplit allow landlords to reduce vacancies, increase revenue per unit, and offer flexible housing solutions.
Kansas City’s job market and growth drivers
Kansas City’s strong rental demand is closely tied to its diverse and expanding economy. The city is home to major employers in logistics, healthcare, finance, and manufacturing, as well as an emerging tech sector.
The city’s key industries include:
- Logistics and transportation: Kansas City is a national freight and logistics hub, anchored by one of the largest rail centers in the U.S. and major distribution centers for Amazon, FedEx, and UPS.
- Healthcare and biomedical: Employers like Saint Luke’s Health System, Children’s Mercy Hospital, and Cerner Corporation provide job stability and attract medical professionals to the area.
- Finance and insurance: Kansas City is home to financial services firms like UMB Financial and American Century Investments, along with H&R Block’s headquarters.
- Manufacturing and automotive: Major Ford and General Motors plants drive demand for housing among industrial and blue-collar workers.
- Technology and startups: The metro has seen significant growth in tech jobs, particularly in cloud computing and AI, with companies like Garmin and emerging startups fueling the trend.
New economic development projects—such as the redevelopment of Parade Park Homes—are also reshaping parts of the city and could influence future rental demand, particularly in urban core areas.
Understanding zoning and rental regulations in Kansas City
Before investing in rental property, landlords should understand local regulations that impact rental operations.
- Short-term rentals: Kansas City requires licensing and zoning compliance for short-term rentals. In 2023, voters approved a 7.5% tax on short-term rentals, and non-owner-occupied STRs in residential zones face increased restrictions. These factors may affect profitability for Airbnb hosts.
- Long-term rentals: The city continues to experience healthy rental demand, particularly in suburban areas, but investors should account for rising competition as new units come online.
- Coliving rentals: Coliving rental models like PadSplit are subject to local occupancy laws and zoning ordinances. Some neighborhoods are more conducive to shared housing based on density and compliance standards.
Best neighborhoods for long-term rentals
Waldo
- Why invest? Waldo offers a mix of suburban and urban living with affordable housing, good schools, and a walkable layout that appeals to a broad tenant base.
- Rental market insight: High occupancy rates and proximity to downtown and key job centers make Waldo a favorite for renters seeking convenience and community.
- Best property types: Single-family homes, townhomes, and duplexes. Many older homes have been modernized, increasing their value and rental appeal.
- Ideal tenants: Young professionals, families, and remote workers looking for affordable housing near amenities and major roads.
Brookside
- Why invest? This historic and charming neighborhood is known for its bungalows, parks, and strong community feel. It’s especially appealing to renters who want suburban tranquility without sacrificing access to downtown.
- Rental market insight: Brookside properties are in high demand and experience low turnover, particularly among renters who prioritize local shops, walkability, and quiet residential streets.
- Best property types: Renovated historic homes, duplexes, and small multifamily properties.
- Ideal tenants: Professionals, small families, and older renters looking for stability in a well-maintained area.
Best neighborhoods for short-term rentals
Downtown Kansas City
- Why invest? Downtown is the epicenter for entertainment, sports, and business travel. It draws steady foot traffic year-round and is well-connected by transit.
- Rental market insight: Short-term rentals in this area benefit from proximity to Power & Light District, T-Mobile Center, and corporate offices. However, STR licensing and the new STR tax may affect margins.
- Best property types: Condos, lofts, and high-rise apartments with amenities.
- Ideal guests: Business travelers, convention-goers, and tourists seeking walkable access to Kansas City’s downtown attractions.
Westport
- Why invest? Westport is one of the city’s most active nightlife and event destinations. Its eclectic vibe and location near midtown make it a top choice for short-term renters.
- Rental market insight: Popular with weekend travelers and festival attendees, but tighter STR regulations may require extra due diligence from investors.
- Best property types: Studios, townhouses, and modern apartments near nightlife corridors.
- Ideal guests: Young adults, out-of-town visitors, and digital nomads looking for vibrant short stays.
Best neighborhoods for coliving rentals
Independence, MO
- Why invest? Located just east of Kansas City, Independence offers affordable home prices and consistent demand from working-class tenants.
- Rental market insight: Many renters in this area prefer room rentals to keep costs down, and homes with multiple bedrooms are well-suited for coliving models.
- Best property types: Spacious single-family homes and duplexes that can be converted into multiple occupancy rentals.
- Ideal tenants: Students, essential workers, and gig economy workers who prioritize affordability and flexibility.
Northeast Kansas City
- Why invest? This culturally diverse neighborhood has a high percentage of renters and is known for its affordability and access to transit routes.
- Rental market insight: Room-by-room rentals are well-suited to the area’s working-class and immigrant populations, especially near schools and job hubs.
- Best property types: Older homes with 4–6 bedrooms that can be optimized for shared living.
- Ideal tenants: Budget-conscious renters looking for housing with predictable costs and community-based support.
Financing and tax considerations for Kansas City landlords
- Financing options: Investors commonly use DSCR loans, hard money loans, and seller financing for investment properties. Kansas City’s relatively low price points make these options more accessible.
- Property tax impact: Property tax rates in the Kansas City metro are considered moderate, but they vary across counties. Jackson County generally has higher rates than neighboring Clay or Platte counties. Landlords should factor in county-specific assessments when evaluating returns.
Make the most of Kansas City’s rental market
Kansas City remains one of the most investable midsize cities in the U.S., with a healthy blend of affordability, job growth, and real estate appreciation. Whether you’re building a portfolio of long-term rentals or exploring newer models like PadSplit, opportunities exist across a range of neighborhoods and investment types.
By staying informed about local zoning, tax policy, and tenant needs, landlords can position themselves for success in a changing market.
Join PadSplit today to increase your rental revenue and make a difference in Kansas City’s housing market.
The information provided in this blog post is for general informational purposes only. It should not be construed as legal, financial, or professional advice. The content is intended to provide general guidance and should not be relied upon for making specific decisions.
PadSplit strongly recommends consulting with qualified legal counsel, licensed financial advisors, tax professionals, or other relevant experts for advice concerning your specific situation and investment needs. PadSplit makes no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, or suitability of the information contained in this post.
