My job is taking me to Chicago this winter. I’ve never lived there, and I could love it or hate it - hard to tell from previous visits. I anticipate that I will stay there for 1-3 years, depending on whether I like the city.
I am considering purchasing a condo for myself to live in which I would rent out later on down the road. I have 20% down available and ready to buy a condo in 250K range.
A couple questions come up though: I heard that Cook County is not landlord friendly, and dealing with a rental later on might be a pain. So for the short term it might be worth just renting. On the other hand, a rental downtown would cost me about $20,000 for year. That’s a lot of lost equity.
The bottom line question is, given the situation of uncertainty whether I will like the city or not and the reality of being a landlord in Cook County, would you recommend renting or buying a condo and renting it out later?
Account Closed welcome to the neighborhood! The Chicago area is a great place to live and invest! Yes Cook County is tenant friendly, and yes the real estate taxes are high. With that being said, I have had clients that purchased properties this year that met the 2% rule in Berwyn, which is only 20 minutes from the loop. I would recommend that you visit the city and look around. It is definitely possible to find a small multifamily property to BRRR if you have enough capital! Visit and check out areas so you can figure out where you would want to live.
@Account Closed I had this same situation last year when my fiancé got a job offer here in Chicago. We ended up renting and actually decided to keep renting here in Chicago and buy more where our other rentals are in Ohio. I’m not sure if you have rentals elsewhere but we couldn’t justify buying here and ending up with a rental condo since we really didn’t know if we were here for the long term or not. Also the Chicago market is hot especially since it sounds like you’re not looking to move to the burbs and end up with what would likely be a better rental property when you moved. Love to hear from someone who is buying rentals now in the hot areas of the city and making the numbers work. Of course there are always deals and opportunities but certainly tricky to find in the popular neighborhoods here.
I would easily say rent for at least a year. There's really not much of a way for anyone moving to a new city to know exactly where they'd want to live...down to the micro-markets/neighborhoods...unless they have prior experience or knowledge of the area. So for that reason alone, I'd say buying may not be all that advantageous.
Deeper than that, maybe $20,000 of "lost equity", but how much would you actually spend to buy a place? My guess is- way more than $20k. Mortgage interest, condo fees, property taxes, repairs, etc.
This is comparing buying a house to buying investment properties, but read just about the points about the actual expenses of buying a house-
Hope that helps.
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