Chicago, IL · Member since 2016 · 2 posts · 0 votes
I know the general consensus is to "just do it" and dive face first into your first deal... but what do you guys use to analyze the overall real estate market in your area? Do you think real estate might have peaked? Also - in chicago, property taxes have been going up. How do you include this in your analysis?
Thank you!!
Chicago, IL · Member since 2015 · 77 posts · 39 votes
9y
Taxes have been going up which sucks but are still relatively low or at least comparable to other areas outside of Chicago, I'm not too concerned about it yet. As for prices, they are pretty high in most places but deals are still out there. I think it's important to invest for cash flow because it's so hard to try and guess which way the market is gonna move
Real Estate Agent · Chicago, IL · Member since 2016 · 176 posts · 73 votes
9y
Taxes in Chicago have gone up, but like @Josh Kundrat said, it's at least comparable to other surrounding areas. I know of many suburbs that have wayyy higher taxes.
Taxes are included in your PITI calculation "principal, interest, taxes, insurance." It should be calculated into your net cash flow because these will be outgoing payments, among other things. You can try to estimate increases in taxes going forward, but sometimes that can be difficult because it's based on assumptions. Factor in some of the local regulations being mentioned and look at it like... how much could taxes increase in order for me to still make my minimum net cash flow requirement per month. If taxes going up even a little bit would make the deal not worth it, then maybe don't purchase.
Analysis points could include:
-Average days on market
-Saturation rate
-Median sales price
-Inventory of homes for sale
-Percent of original list price received
-Change in median sales price
compare this month to last month, but also year-over-year, winter markets tend to slow down so it's not really "fair" to compare it solely to the summer.