Help me understand downtown Chicago, IL airbnb / condo rentals
Because of a part-time job in Chicago (housing reimbursed by employer) I'm considering an investment property in the area -- if for no other reason than to write off expenses, and because there are still deals to be had here.
This may sound like an emotional call, but I've always wanted a high-rise condo with a view of the lake and the city. Honestly there aren't a lot of other good reasons to live in Chicago ;)
I've been underwhelmed by the cap rate on standard rentals, but noticed this analysis of airbnb rentals:
https://smartasset.com/mortgage/where-do-airbnb-ho...
In short, Chicago is the 3rd best market in the country, with a 71% occupancy rate. Looking at comp rentals, it looks like I could get cap rates of 10-12% at least.
What makes me hesitant is:
- I hate HOA's.
- The market for non-HOA properties (including dilapidated multi-family shacks that look terrible but must cash-flow like mad) has skyrocketed in the past 4 years, whereas the market for mid/high-end condos with HOA's is still pretty bad.
Questions for people doing this:
- how much work is it, relative to a regular rental? What sort of property management / cleaning services do you use?
- would this at all be feasible for a mostly absentee landlord (albeit, one with family in the area)
- for properties with HOA's (i.e., most of the ones in high rises with great views), are you cash-flow-positive?
- is there a sweet spot that minimizes vacancy? Downtown/streeterville? South loop? Lakeview, Edgewater?
- I've noticed people listing their units on airbnb in buildings that officially prohibit it. Is this a gray area? What are the repercussions if you're caught?
Thanks for your perspectives.