Curious about investing in Kansas City, MO?

Kansas City is my hometown and a popular choice for people looking to move and invest. In fact, the Show Me State ranked as one of the best places, as the seventh most popular moving destination in 2020, according to data from U-Haul. Data suggests that most people moving to Missouri come from Kansas, Illinois, Texas, and California. 

Getting to Know Kansas City

If you’re not familiar with the Missouri Kansas City metropolitan area, it is a great place with lot to learn and explore. Kansas City is known for its world renowned local cuisine – barbecue. Beyond food, visitors love so much that Kansas City has to offer for your next visit. Whether you desire an entertainment district, restaurants, museums, art communities, movie theater, shopping districts, live music or golf courses – Kansas City has a lot to offer.

Kansas City Travel Time & Traffic

Depending whether you go north, south, east or west – travel time and traffic are minimal. The Kansas City area and downtown area have a big city feel with small town charm. New construction residential units and single family homes are popping up all over the city as more residents move to the area. North of the Missouri river you will find areas like Platte City. There is a lot of open space with trails and a country feel. Neighborhoods and schools in this suburb are popular for kids and a great place for families.

Kansas City Suburbs

Popular suburbs of downtown Kansas City include Blue Springs, Lee’s Summit, Overland Park, and Independence. These neighborhoods have a lot to offer in terms of school, space, shopping and demographics. While you explore Kansas City make sure to experience the various seasons. Whether you visit in June, January or October, there is much to love about summer and winter in the midwest. From trails, to restaurants or art there is so much to search for and experience. Looking to spend quality time with children? The city and suburbs are very family friendly.

Kansas City Median Home Values

Kansas City, MO is constantly growing with median home and median home value increasing along with median household income. No matter the zip code, new construction and single family homes increase as the population grows. Residents love the travel time from the suburbs to the city. This makes it ideal for residents to explore the city. From Overland Park, Kansas to Platte City and back to Blue Springs, you can really get a feel for the different zip codes and what each county has to offer.

While Kansas City has a wealth of areas to settle including thriving urban areas, small towns, and quaint country destinations, many people wonder about the cost of living in Kansas City, MO. Whether you are interested in downtown Kansas City or a suburb – let’s take a look at how it breaks down. 

Is Kansas City Affordable to Live? 

The most expensive factor in cost of living is typically housing costs. Zillow calculates that a typical Missouri home has a median cost of $210,489. Thus, homes in Kansas City, Missouri are fairly cheap when compared to the national median cost of $320,662.

However, housing costs in Missouri are increasing, rising 16.2% in the past year. In fact, the median housing cost in February 2021 was over $25,000 cheaper than the current median cost. 

Median Housing Costs

Since many people move to cities like downtown Kansas City, it is also important to consider the median housing costs in these areas. The median housing cost in Missouri’s three largest cities is $264,395 for Kansas City, $224,320 in St. Louis, and $214,341 in Springfield. It is important to note that these costs are for the metro areas rather than just the city limits. 

Owning vs. Renting in Missouri Kansas City

Renting may be a cheaper option depending on where you live. Missouri’s average fair market rent cost for a 2-bedroom is $728. However, average fair market rent for Jackson County (Kansas City) is $1,021. Thus, using a 30-year mortgage at the current Kansas City metro median home price, a monthly payment would be $1,036 while rent would be an average of $728. 

What is the Kansas City Cost of Living?

While utilities in Missouri are not prohibitively costly, they are among some of the highest in the nation. In fact, Missouri ranks as ninth most expensive in terms of overall utilities at $333 per month. 

In terms of utilities, electric is anticipated as the greatest expense with an average of $127. This is followed by natural gas at $108, cable at $40, and water at $38. Internet access is tied with several states for most affordable in the nation at $20. 

Of course, it is important to understand that some of these values such as cable and internet will vary considerably based upon what you sign up for. Meanwhile, many factors such as efficiency of appliances and size of dwelling can impact costs like electric and natural gas. 

Kansas City Average Food Cost

Food costs are notoriously difficult to predict due to a number of factors such as variation within a state and, most notably, personal eating habits. For this estimate, Move’s average cost of food article was referenced. 

This calculated food for each state based upon the average cost of purchasing groceries in the state’s largest city. Thus, for Missouri, the value was calculated in Kansas City. It is important to note that things like eating out were not included in this figure. 

The average food cost for Missouri was $313 per person monthly. For a family of two, this would be $626 per month. Fortunately, food costs in Missouri are not very high comparatively. In fact, Missouri ranked as the twelfth most affordable state in terms of food cost. 

Kansas City Average Healthcare Cost

Healthcare is an increasing cost for many Americans. Healthcare is driven by many variables but geography is a major one as various state legislation and policies are among the things that affect healthcare costs. 

The average monthly health insurance premium for the United States in 2021 was $452 according to data from Health Markets. Missouri is slightly more expensive than the national average, with the average health plan premium coming in at $479. 

It is important to remember that this estimate is just the cost of purchasing health insurance. Other costs incurred will vary highly from person to person depending on the medical care needed and the various copays and deductibles of a person’s insurance plan. However, this helps estimate the base cost of healthcare in Missouri. 

Missouri Average State Taxes

Missouri utilizes a progressive tax system with rates increasing as income increases. The median household income for Missouri in 2019 (the most recent year available) was $57,409. Using the Missouri state income tax calculator, this results in a median state tax bill of $2,913, or roughly $243 per month. 

In terms of property taxes, the average effective property tax rate in Missouri is 0.93%, which is lower than the national average of 1.07%. For the median home price in Missouri, this ends up yielding a property tax cost of $1,958, or roughly $163 per month. This expense obviously would not apply to those renting. Curious what tax benefits come along with real estate? Read more about that in this article.

Missouri Average Transportation Cost

For most people, calculating transportation costs involves calculating two different factors: gasoline spending and car insurance spending. According to the U.S. Department of Transportation, the average American drives approximately 1,123 miles per month. Meanwhile, government data shows that the average fuel economy of a light duty vehicle is 25.7 miles per gallon. This means the average person needs 43.7 gallons per month. 

The average cost of regular gas in Missouri in early 2022 was $3.148 per gallon, making it the fourth most affordable state in terms of gas cost. Thus, the estimated monthly gasoline expenditure for the average person would be $138. For a two vehicle household, this would make monthly gasoline costs an average of $276. 

The cost of car insurance is a bit simpler to calculate. According to Insurify, the average monthly car insurance cost in Missouri is $265 per vehicle, which is 13.2% higher than the national average of $234. For a two car household, this yields a cost of $530. 

Kansas City Total Cost of Living Estimations

Thus, the various costs of living in Missouri for a two-person household are as follows:

• Housing – $1,036 to own and $728 to rent
• Utilities – $333
• Food – $626
• Healthcare – $479
• State Taxes – $406 ($243 for renters)
• Transportation – $806

Ultimately, the total estimated average cost of living in Missouri in 2022 is $3,686 for homeowners. For those who rent, the average cost of living in Missouri would be $3,215. It is important to realize that this is the cost of essential expenses only. 

The 50-30-20 rule of budgeting recommends putting 50% of your monthly income to essential expenses, 30% towards discretionary expenses (i.e. eating out, entertainment, etc.), and 20% into savings. Using this rule, the minimum household income for two adults to rent in Missouri would be $77,160 while the minimum household income to own a home would be $88,464.  

Thinking about Kansas City Investment Properties?

No matter the zip code, as you can see there is a variety of median home value and a growing population on both sides of State Line. With convenient suburbs, great schools for kids, delicious restaurants and less travel time to the city, Kansas City could be a good fit for your investment property. If you need help determining the best zip code for your next project, don’t hesitate to reach out. No matter where you are located we are happy to help out!