Home Buying in Chicago>Question Details

Bazaa, Home Buyer in Chicago, IL

Investment property (possibly Condo) in Chicago

Asked by Bazaa, Chicago, IL Wed Sep 26, 2007

I am looking for investment property which I can rent. What are some the potential neighborhoods to look at in Chicago. This is a long term investment (3 to 5 years)

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I agree with Ken about your timeframe not being long term. Unless you are a builder or rahabber creating new value to a property net appreciation will take much longer than your proposed timeframe. When the real estate market was more normal the general rule of thumb was that it would take approx 2 years with 5% appreciation per year to break even. That's because selling costs could be as high as 10%.

Here is my blog on common mistakes when ibuying investment properties.
http://activerain.com/blogsview/533939/10-most-common-mistak…
0 votes Thank Flag Link Sun Nov 9, 2008
With this current market - this is a buy and hold market. So it is great to see that you are deciding to invest now.. There are going to be a lot fo millionaires and billionaries in 5 to 10 years because of this down market. So neighborhoods will depend on your strategy on how to up keep those properties. Meaning, the distance from your home. If you decide to use a property manager, then the distance will not matter. I believe, if you do not already, you should have your team set up first, then find the property(s). Write down what type of property you want, in what type of price range, what are all the expenses associated with that property, how much rent you would need to collect, now all the things that can help to make that property rent faster (e.g. train nearby, school nearby, near certain employers). Now that you have atleast some kind of questions to ask yourself - now you have to go out and find some opportunities in the neighborhood that make sense for you.

Good Luck!
Web Reference: http://cashbuyernetwork.com
0 votes Thank Flag Link Sun Nov 9, 2008
Hello Bazaa,

In Real Estate, 3-5 years is a short-term Investment. You need to consider the costs associated with buying and selling and whether you can recoup such costs in a relatively short period of time based on appreciation rates. Up and coming areas may take time to get noticed and more mature areas with good appreciation may be less affordable.
Alternatively, if you have the ability/knowledge to rehab a property (2/3 flat), that may allow you to take a short term approach to investing where you improve a property, hold it and increase rents and resell within the timeframe you outline hopefully for a profit.
Lincoln Square, Roscoe Village and Lakeview neighborhoods all have upside potential.

Sincerely,

Ken Dooley.
Web Reference: http://www.KDRchicago.com
0 votes Thank Flag Link Thu Oct 4, 2007
A very affordable, high potential area is the South Loop, followed closely by the West Loop. A wide range of Condos that have great views and are close to Down Town, Lake, highway etc. If the Olympics are being held in Chicago in 2016, neighborhoods like: Bronzeville, Hyde Park, Washington Park located 10 min from downtown along the lake will be in demand. You have many options. It is important to sit with a Realtor and discuss neighborhoods and appreciation in more detail.
0 votes Thank Flag Link Wed Sep 26, 2007
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