Operating Expenses to account for in Chicago market
Hi BP forums,
I'm currently doing research to figure out what a buy and hold on a small multifamily property (2-4 units) under $800k would look like in the Chicago market.
For context, I'm only at the very beginning of my journey, exploring different markets to potentially move to and do a house hack in where I could break even or cash flow, and at initial glance Chicago seems to have potential. I live in NYC right now and plan to for one more year, but from what I'm seeing, it'd be much more difficult to find something that fit my criteria here. After visiting a few times, Chicago is a city that I could see myself living in for a few years after NYC and pick up a few house hacks that turn into long-term rental investments along the way. It's currently the leading market for me after I leave NYC in a year, although at this stage I'm still open to other markets for this purpose.
In doing this research, I'd love to learn more about what operating expenses generally look like in this market. I know this is probably a broad topic, as Chicago is huge and these things vary on a case by case basis. But would just love to get a general lay of the land so that I know where I need to dive deeper on.
Some examples of things I'd like to know more about are:
- What types of utilities are typically paid by landlords vs tenants in this market?
- What kind of monthly expenses will I generally need to take into account when running my numbers (e.g. snow removal, waste pickup, water / sewer, etc)?
- How much will electric and gas typically cost in this market?
- How much should I allocate towards repairs & maintenance and capex? How does this change based on the age of the property (I know most multifamilies in the market are over 80 years old so would love to understand how frequently problems typically arise)?
- What kind of upfront costs would I need to account for as a first-time investor in this market (e.g. are there licenses I need to get / pay for? if I want to do value-add renovations on a property, how much would I need to spend on getting permits with the city to do so independent of the actual rehab costs?)
- Anything else that I should be sure to keep in mind when running numbers for properties in this market that I may not find elsewhere?
Thanks,
Fed