Home Buying in Chicago>Question Details

salfizo, Home Buyer in Chicago, IL

Rent v. Buy in Chicago

Asked by salfizo, Chicago, IL Mon Oct 29, 2007

My husband and I relocated to Chicago this year and are currently renting a 1 bedroom in the Loop for $1500 with parking. We would like to find something affordable to purchase or rent elsewhere preferably larger (2 bed). We were looking into South Loop, West Loop, or Hyde Park. We don't have much saved for a down payment however. Is there much in the rental market for these areas? Or would it be possible to find a condo to purchase that would be within what we can pay monthly? Thanks!

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Salfizo mentioned West Loop, South Loop and Hyde Park and asked about the market in these specific areas. My response was based on that. She could certainly go an outerlying suburb and find something much cheaper.
0 votes Thank Flag Link Mon Oct 29, 2007
Patti Pereyra, Real Estate Pro in Chicago, IL
Hi Salfizo,

In order to stay at around $1500 monthy payments for a condo (taking into account **average** taxes and assessments for a Chicago condo - these will obviously vary), your loan amount max would have to stay at around $150,000 (also taking into account the slightly higher interest rate you would have to pay since you have no or very little money down, and possible PMI).

It IS possible to get a condo for $150,000 in the city, but you'd have to head far south or far north, or into newly developing areas of the city. A 2 bedroom/2 bath with parking included in this price range would be nearly impossible in the city.

The truth of the matter is, on a month-to-month basis, it is cheaper to rent than own in terms of the amount of space you can get for rent v. buy. However, when you take into account the tax breaks you get as a homeowner and the eventually equity you will build as a homeowner, the overall 'big picture' may show you that owning is cheaper in the long run.
0 votes Thank Flag Link Mon Oct 29, 2007
Patti Pereyra, Real Estate Pro in Chicago, IL
If $1,500 per month is all that you really have...I don't think that you will be able to find anything larger than a 1 bedroom. There is a mortgage calculator on my website at http://www.CONDOChicago.com You must consider the monthly costs of assessments and taxes on top the the Principal and interest of the loan and PMI if you don't have 20% down (or cost of an equity line)... to determine your total monthly cost. Also consider the other benefits of owning- appreciation and tax deductibility of interest and property taxes.

Good Luck
Web Reference: http://www.CONDOChicago.com
0 votes Thank Flag Link Mon Oct 29, 2007
There are all kinds of deals in the city...there are some really good values in the Rogers Park area...pretty close to the Lake.

Go drive the neighbourhoods around Hyde Park..in the smaller, (10 to 20 units) there are all kinds of good values and incentives.
Web Reference: http://www.iansellsnola.com
0 votes Thank Flag Link Mon Oct 29, 2007
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