Chicago Downtown Condo for STR/VRBO/Airbnb - Bad Idea?

5 Replies

Hello all!

I am a complete newbie to this field (and forum) so please go easy on me. Me and one of my friends are thinking of buying a lakefront Condo in downtown Chicago (2BA/1.5+ Bath). We both live few hours drive from Chicago. Our plan is to hire a full service property manager to manage the renting out and maintenance part and use it for personal use few times a year.

We both are very busy with our daily jobs and cant really do the management and maintenance ourselves. We are realistic and goal is not to generate a huge income but to diversify our investment, use the business to lower our tax burden (since we both are employed and get hit by significant taxes at the end of the year) and make enough that it pays off the mortgage/taxes (or at least a major portion of it). Also, we want to buy something we see ourselves renting out on vacation.

Am I being unrealistic or stupid? Any advice would be hugely appreciated. Thanks!

@Adarsh Sahni - To me it sounds like a good idea since you are just trying to create a little bit of passive income on the side and lower your tax burden.  If your response was "trying to make a huge cash on cash return" I'd have a different response.

Personally, I have my airBnB and self-manage, but use some nice tools like yourporter and booking lab to help automate a lot of my process.  I had a bad experience with a previous airBnB manager so be careful and vet them well.

If you have any specific STR questions let me know.....be careful with HOAs many dont allow

Long-time Chicago resident here. I own and manage 25 apartments. 20 are STR/Extended Stays. Self-Managed. $40-$50G per month revenue from STR. My quick thoughts below:

1). Chicago has a STR ordinance. You should be aware of that by now.

2). Most downtown buildings will not allow STR.

3). STR Property Manager will take at least 25%.

It is probably better to just get a hotel when you want to visit Chicago.  Keep your first investment in your own “back yard” where you can manage it yourself.  

Originally posted by @Kevin Morgan :

Long-time Chicago resident here. I own and manage 25 apartments. 20 are STR/Extended Stays. Self-Managed. $40-$50G per month revenue from STR. My quick thoughts below:

1). Chicago has a STR ordinance. You should be aware of that by now.

2). Most downtown buildings will not allow STR.

3). STR Property Manager will take at least 25%.

It is probably better to just get a hotel when you want to visit Chicago.  Keep your first investment in your own “back yard” where you can manage it yourself.  



@Jonathan Klemm

Thanks for the detailed reply! 

Regarding Chicago ordinance, can you please expand as I see several Condos listed on VRBO's website for STR. I think its clear from most replies that its dependent on individual buildings/HOA as to whether they allow STRs or not.

I am open to looking at other places as I have no personal connection to Chicago. Its just that its the closest big city to where we live. I have been reading on other forum threads that's it better to find a STR property on typical 'vacation' locations rather than urban. Is that consistent with your experience?

Originally posted by @Adarsh Sahni :

Hello all!

I am a complete newbie to this field (and forum) so please go easy on me. Me and one of my friends are thinking of buying a lakefront Condo in downtown Chicago (2BA/1.5+ Bath). We both live few hours drive from Chicago. Our plan is to hire a full service property manager to manage the renting out and maintenance part and use it for personal use few times a year.

We both are very busy with our daily jobs and cant really do the management and maintenance ourselves. We are realistic and goal is not to generate a huge income but to diversify our investment, use the business to lower our tax burden (since we both are employed and get hit by significant taxes at the end of the year) and make enough that it pays off the mortgage/taxes (or at least a major portion of it). Also, we want to buy something we see ourselves renting out on vacation.

Am I being unrealistic or stupid? Any advice would be hugely appreciated. Thanks!

There's nothing unrealistic or stupid about what you're attempting to do. My advice- There are many buildings in downtown where the HOAs have put restrictions on STR/VRBO/AirbnB. They will allow rentals but not STRs. So do your due diligence to determine which ones allow STR. Another thing to consider is purchase right outside of "downtown" We do staycations in Chicago using AirBnB & stayed in great places in Lincoln Park, Hyde Park, Bronzeville,..... Not downtown but still near everything.