"Rentability" of Garden Units in Chicago

General Landlording & Rental Properties
9yFollow

"Rentability" of Garden Units in Chicago

Kyle Hansen
Chicago, IL · Member since 2017 · 2 posts · 1 vote

I'm a first time investor in Chicago and I've noticed that garden apartments are MUCH cheaper than an apartment just one floor about it. This obviously isn't a surprise - people in cities prefer to be higher - but the factor of difference was surprising, often $20K-$30K between floors.  The low price of these garden units is very tempting and also opens up where I can purchase quite a bit (these are the only properties near the city that meet the 1% rule), so my question is: how much will garden units affect my rent potential and vacancy assumptions?

Does anyone have experience with garden units that could provide anecdotal advice? Is the "crime factor" that everyone seems to point to with garden units a reality, or just a stigma? 

The areas I'm looking are very nice and very populated areas near downtown, so even with the potential lower demand of garden units, I don't feel like my vacancy estimate should be impacted, but potentially the rental amounts. 

Thanks!

Kyle

1Reply
72 views

8 Replies

Jump to latestLatest
  • Jeff Burdick
    Investor · Chicago, IL · Member since 2016 · 515 posts · 247 votes
    9y
    Originally posted by @Kyle Hansen:

    I'm a first time investor in Chicago and I've noticed that garden apartments are MUCH cheaper than an apartment just one floor about it. This obviously isn't a surprise - people in cities prefer to be higher - but the factor of difference was surprising, often $20K-$30K between floors.  The low price of these garden units is very tempting and also opens up where I can purchase quite a bit (these are the only properties near the city that meet the 1% rule), so my question is: how much will garden units affect my rent potential and vacancy assumptions?

    Does anyone have experience with garden units that could provide anecdotal advice? Is the "crime factor" that everyone seems to point to with garden units a reality, or just a stigma? 

    The areas I'm looking are very nice and very populated areas near downtown, so even with the potential lower demand of garden units, I don't feel like my vacancy estimate should be impacted, but potentially the rental amounts. 

    Thanks!

    Kyle

     Are you talking about garden units in multifamilies or condos? Garden units typically rent for less because people don't like living in a basement as much as above grade. 

    0Reply
  • Kyle Hansen
    OP
    Chicago, IL · Member since 2017 · 2 posts · 1 vote
    9y

    Yes, garden units in condos. I'm trying to understand what the rent impact would be from a garden unit vs a 1st floor unit. And if anyone has had "bad experiences" with trying to rent out garden units.

    0Reply
  • Steve Nowak
    Boston, MA · Member since 2013 · 99 posts · 28 votes
    9y

    I've never owned one, but I can share my experience as a former renter.  My first apartment was a garden-style unit.  Because it was partially in the basement, it regularly had a musty smell and eventually mold developed.  Granted, it was my first time living away from home.  I was a lot younger then and didn't have the best housekeeping habits.  But I would never want to live in one again.  If you're considering buying one, consider the potential maintenance costs.  They can be more prone to flooding, etc.

    0Reply
  • Gail K.
    Augusta, GA · Member since 2014 · 1k+ posts · 1k+ votes
    9y

    My father was a janitor for decades in a Chicago suburb (Evanston).   As such, the janitor got the garden apartment (back then we called it the basement apartment) rent free as part of the employment deal so he could be on "standby" 24/7.  They lived in one for 20+ years (I lived there from age 14 to when I did a college transfer at age 20).   Other than it being hot in the winter (steam heat; radiators on the ceiling) and later realizing how tiny it was (all the apartments in the building was only about 800 square feet) I remember the only problem we ever had was the risk of the toilet overflowing during very, very heavy rain storms (dad built some type of wooden contraption to place in the toilet during heavy summer rains to push pressure on the water).  The other two "garden apartments" in the building never reported overflowing issues so we may have simply been on the end of the sewer line.

    Gail

    0Reply
  • Alex Bok
    Real Estate Agent · Chicago, IL · Member since 2016 · 283 posts · 71 votes
    9y

    Garden units in my experience as a renter and owner  has been good. They just need to be maintained very well the only thing I will say that is sometimes it does get a little damp and you tend to have some more bugs coming through the windows. Also air circulation is not often that great and the air sometimes is a bit harsh esp if you have the boiler in the basement etc

    0Reply
  • Nathan Zale
    Real Estate Professional · Chicago, IL · Member since 2017 · 6 posts · 0 votes
    9y

    Hey Kyle, I am a broker a deal with leasing in Chicago. most of the clients I deal with do not want garden units since these units don't get exposed sunlight and of course uncertainty with security and safety. if you are thinking of investing in a garden unit just keep in mind they can be rather challenging to rent out.

    0Reply
  • Ryan Maes
    Chicago, IL · Member since 2015 · 9 posts · 11 votes
    8y

    Hi Kyle - I'm a little late to the game, but I have the exact same question. I live in Chicago [and in a garden unit]. My fiance and I don't mind it as it's a cheaper alternative and realistically we spend a lot of our time outside when weather permits. Our condo has had no issues in the past 15+ years [since converted from apartment] even with torrential downpours; the only drawback I've personally encountered is the change in temperature during the seasons. It's harder to keep the unit warm in the winter, but in the summer the AC rarely turns on because the ground keeps it cool.

    I was recently looking at a potential lead for a garden unit as a rental and decided to search BP and this came up. Did you end up pulling the trigger on a garden unit? Curious to see if anyone else out there has found this strategy advantageous? 

    0Reply
  • Joe Cantanzriti
    Rental Property Investor · Chicago, IL · Member since 2014 · 132 posts · 74 votes
    8y
    Kyle Hansen In the nicer areas of Chicago you probably won’t have a difficult time with vacancy necessarily but you may have a problem with tenants staying there for more than a year, seems like the lack of sunlight is what does it. You’ll certainly be 10-20% less in rental income vs the same unit one floor above you, which is also why the price tag is likely 10-20% less. Save up a couple more bucks and hold out for the more desirable unit, you’ll benefit in the long run and have longer terms tenants.
    0Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free