I am starting my path to passive income with rental income from properties. I am still in the read/learn phase but hope to move to get my 1st deal done in late 2019/early 2020. I am focused on the suburbs, primary Naperville, Lisle area. Would a condo be a good get my feet wet or is single-family home the better longer-term method? My goal is to buy a property with $100- $150/month passive income. Any guidance/thoughts would be good. TIA
I've been looking in Naperville for over 6 months for both Condo's and SFH's, and the taxes, Condo Assessments and HOA's all drive the cost up where it's pretty difficult to get a cash flow of over $100/month without putting do a very large downpayment. Which really lowers you Cash-on-cash (COC) returns, which defeats the purpose unless you are looking for an appreciation play, which is a little risky at this part of the cycle. Look to Romeoville, Lockport, Aurora, and other small towns around Naperville and you might find something that fits your criteria.
@Vivek Desai it really depends if you have the energy to maintain the exterior of the home - if not, then a condo/townhome would be a pretty good option if the complex allows rentals (have your real estate professional check this for you). In the Naperville area, single family homes tend to appreciate better and you can find tenants quickly as the school systems are highly rated. I come across properties daily that I feed to my investor clients that have $200/mo in cash flow w/ 12% cash-on-cash return. There are pockets of neighborhoods in surrounding towns to Naperville that are ideal for investing $200k> - just need a local expert who knows where to look and can help you achieve your real estate goals.
We are about to add two properties to our eleven, all but three are condos (the three are duplex halves). We did well buying several foreclosures ten years ago, nowadays we are making maybe $100 per door on new places, but my husband is very bullish on Naperville appreciation. (We also don't automatically raise the rents each year like so many on here advise.) We like condos because we don't want to fuss with exterior stuff, and even Naperville tenants are not great at maintaining yards and exteriors. Look along the 59 corridor, just to the west of 59, around White Eagle. Those are legally in Aurora despite having a Naperville mailing address. (Some shenanigans cooked up by White Eagle developers as Naperville is snootier that Aurora). The dues are usually $100-$200 a month less than comparable places in "true" Naperville. Beau Monde in Lisle can be had pretty cheap, and apparently not hard to find renters, although it's far too close to I-88 for me.
@Vivek Desai agree with alot of the comments already posted. I started out with 2 condo's in Naperville, albeit 6 years ago when prices were lower. There are still plenty of deals on condo/townhomes in the Naperville area, but prices do seem to be trending upward so it will get harder and harder to find. I would def get with a realtor and set up some alerts if you are serious about pulling the trigger quickly, as this is normally what it takes to buy a property that makes sense in Naperville.