Rent vs Buy in Chicago>Question Details

Brad Wible, Home Buyer in Washington, DC

RENT or BUY: 3 years in Chicago, East of Kedzie, North of Irving Park

Asked by Brad Wible, Washington, DC Tue Jul 15, 2008

Moving from DC to Chicago for a job, after being in Chicago from '97 - '04. I have no debt, above average credit, will make $80K. But unsure about whether to rent or buy, largely because I'm not sure whether I'll be in Chicago for longer than 3 years, thus will home value likely increase enough in this market to break even or make a profit compared to renting. Would want to live north (e.g., Uptown, Edgewater, Lincoln Square, Ravenswood, Andersonville, Rogers Park), wouldn't need anything fancier than modest 1 BR. Hope to spend not much more on mortgage than I'd spend on rent (is $1500/month realistic?). My question: Are those north side housing markets, for 1 BR units, healthy enough to grow enough to make it worthwhile if I need to skip town in 3 years? I'm a data driven guy, so if you can throw some numbers, I'd appreciate it. Thanks!

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5
Joe Zekas’ answer
If your time horizon is 3 years you should lean toward renting – the one caveat being whether you can find the home you want within the rental market.

You have a huge variety of options in your target area today in both the rental and sale market, and can easily find what you want for far less than the $1,500 a month you're able to spend.

If you're going to buy, I'd recommend you try to find a 2 bedroom within your monthly budget. In most cases a 2 bedroom will be easier to resell in your area since it will have less competition than 1 bedroom units – of which there is a very large supply in the area.

One thing you might consider is renting for a year. By that time you'll have a better fix on the options in the for sale market and, perhaps, a better fix on what your time horizon is for remaining in Chicago. I don't think you'll find very many people who think prices will be higher a year from now than they are now.

One further tip - never ever respond to a mortgage broker who pitches you online. Or, as Ogden Nash phrased it: "When called by a panther - don't anther."
Web Reference: http://yochicago.com
0 votes Thank Flag Link Sat Jan 31, 2009
Hi Brad,

I know this is an old question but I wanted to provide a link to a useful Rent vs Buy calculator that you can use in determining your next move. Please click on the following link http://www.kendooley.com/buy-vs-rent/

Best of Luck, Ken Dooley
Web Reference: http://www.KenDooley.com
0 votes Thank Flag Link Sat Jan 31, 2009
Rent. If you have to recoup the 6% commission, your house/condo has to appreciate 6% in the next 3 years, and it doesn't look like that is going to happen. Most housing in Chicago is depreciating (losing value). The tax write off it just a selling point for realtors, it doesn't amount to much, ask a CPA or find a rent vs buy calcualtor on the web. I've heard the New York Times has a pretty good "rent vs buy" calculator on their site. Plug in your numbers, and you will learn that it is better to rent for a 3 year stay in Chicago.
0 votes Thank Flag Link Thu Jul 17, 2008
Let me know if you need to get financing. I am a mortgage broker. sean@qualitymortgagelending.net

630-330-2229
0 votes Thank Flag Link Wed Jul 16, 2008
You receive a tax benefit over 3 years check with a CPA work on some of your questions, have you thought about purchasing a foreclosure with equity could be a benefit for you. Then if you have to move you might be able rent the property where you earn extra income property increases in value
http://www.lynn911.com http://www.homes-for-sale-dallas.com
Web Reference: http://www.lynn911.com
0 votes Thank Flag Link Tue Jul 15, 2008
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