Downtown Chicago Midterm Rentals
Investor · Member since 2022 · 111 posts · 150 votes
Downtown Chicago Midterm Rentals
Most Popular Reply
Member since 2022 · 6 posts · 10 votes
2yHello all!
I am new to the group as I am just starting out as a MTR investor. However, @Luke Stewart hopefully I can add some value here regarding your question about Chicago winters and getting more bang out of your rentals.
I've been in the hotel business in downtown Chicago for over a decade and I can tell you there is A LOT of business here. Summer or winter it doesn't matter. The key is not necessarily to fill your MTR with true leisure business coming in, go after businesses that have business travelers coming in and out of these downtown offices. Since you are focusing on 30+ days walk into the lobby of an extended stay hotel (Homewood Sweets, Extended Stay America, Choice Hotels with Extended stay etc.) and look for the reader boards. These are boards in the lobby where they will put the name of companies that are having meetings in the hotel. They will generally put the name of the company on there and you can use that as a target list and start dialing for dollars.
Another thing to consider is the compression that is coming into the area. For instance, Choose Chicago (I used to work for them) is the marketing arm for the city and they drive huge pieces of business that will drive hundreds of people into downtown selling out all the hotels and driving prices crazy high. I've seem people pay $700+ a night over Lollapalooza. This also happens in the winter as well, just depends on what is going on in the city. The sales people will layer these types of conventions so that the hotel community stays full as much as possible. There will be gaps of course, but I would suggest that you use this to your advantage to max out your rental potential in advance.
Hope this helps!
41 Replies
- Investor · Chicago, IL · Member since 2018 · 352 posts · 176 votes4y
Quote from @Luke Stewart:
I am looking to buy a condo in the city using a second home loan. I know all the second home loan requirements so no need to hash that out here. I am more interested in people who do midterm rentals, anything over 1 month....
I know some people who rent to travel nurses/techs etc, I think its a great business idea. If you are in the industry then you already have the connections. My wife is also in healthcare so we've considered going that route too. Just be careful that the condo building you are buying into allows for short-term rentals (or any rentals for that matter). That's sort of the catch, the larger the building and the more amenities it has, the more rules you will run into. 2-3 story walk-ups in nice neighborhoods could be a good place to start, lower HOA fees too.
- Investor · Member since 2022 · 111 posts · 150 votes4y
Quote from @Michael K.:
Quote from @Luke Stewart:
I am looking to buy a condo in the city using a second home loan. I know all the second home loan requirements so no need to hash that out here. I am more interested in people who do midterm rentals, anything over 1 month....
I know some people who rent to travel nurses/techs etc, I think its a great business idea. If you are in the industry then you already have the connections. My wife is also in healthcare so we've considered going that route too. Just be careful that the condo building you are buying into allows for short-term rentals (or any rentals for that matter). That's sort of the catch, the larger the building and the more amenities it has, the more rules you will run into. 2-3 story walk-ups in nice neighborhoods could be a good place to start, lower HOA fees too.
Thanks Michael,
I try and skip the STR rules by doing over 1 month, however if I had the option I would definitely fill gaps that way. Good to know about bigger buildings and more amenities having more rules, that makes total sense to protect the full time residents. I love the midterm rental and its how I rent my home in Denver. My family is in Chicago so I am curious to buy a place that I would live in when in town. But I know Chicago winters too well, and the last thing I want is to calculate cash flow and returns on summer rent to have it turn negative come January. Thanks for the insight!
- Real Estate Agent · Chicago, IL · Member since 2021 · 62 posts · 86 votes4y
Hey Luke!
So the good news is that there are currently two full-amenity condo buildings in/near downtown Chicago in prime A+ Class neighborhoods that allow short-term rentals: 545 N Dearborn and 30 E Huron. However, both associations have a 30-day minimum for all lease agreements.
Unfortunately, the bad news is that there really aren't any other buildings that I know of where the association allows short-term leases. I have done quite a bit of digging and I've been told by multiple agents that these are the only two that don't have rules against STR.
If you're serious about going this route, I believe that these two buildings would be a good place to start.
Also, if you're not completely set on the buildings being full amenity, I agree with @Michael K. that you can find some multi-unit gems in great neighborhoods and operate them as STR buildings. Just be wary that technically, according to Chicago's Airbnb ordinance, you can only operate 25% of the units in your building as Airbnbs. I heard this on Straight Up Chicago podcast episode 143 about rules for STRs in Chicago. Here's a link to that episode if you're interested: https://www.straightupchicagoi...
I think that overall, multi-unit buildings will be your best bet if you don't want to risk getting in trouble with condo associations.
However, if you don't mind taking on that risk, you can also run numbers for condo units so that they still work as regular rentals. Then if the association cracks down, you'll have a backup plan where you still at least break even on PITIA.
Hope that helps!
- Investor · Member since 2022 · 111 posts · 150 votes4y
Quote from @Tom Casey:
Hey Luke!
So the good news is that there are currently two full-amenity condo buildings in/near downtown Chicago in prime A+ Class neighborhoods that allow short-term rentals: 545 N Dearborn and 30 E Huron. However, both associations have a 30-day minimum for all lease agreements.
Unfortunately, the bad news is that there really aren't any other buildings that I know of where the association allows short-term leases. I have done quite a bit of digging and I've been told by multiple agents that these are the only two that don't have rules against STR.
If you're serious about going this route, I believe that these two buildings would be a good place to start.
Also, if you're not completely set on the buildings being full amenity, I agree with @Michael K. that you can find some multi-unit gems in great neighborhoods and operate them as STR buildings. Just be wary that technically, according to Chicago's Airbnb ordinance, you can only operate 25% of the units in your building as Airbnbs. I heard this on Straight Up Chicago podcast episode 143 about rules for STRs in Chicago. Here's a link to that episode if you're interested: https://www.straightupchicagoi...
I think that overall, multi-unit buildings will be your best bet if you don't want to risk getting in trouble with condo associations.
However, if you don't mind taking on that risk, you can also run numbers for condo units so that they still work as regular rentals. Then if the association cracks down, you'll have a backup plan where you still at least break even on PITIA.
Hope that helps!
Tom,
This is great information, thank you. I am definitely focused on 1 month or more rentals, I love the mid rental approach, aiming at people waiting to buy home, people in the city for work, so in that regard it definitely makes the HOA laws more flexible. I am not set on full amenities but I do find that my Denver spot rents constantly and I believe a lot of that is due to the fact that its a one stop shop for people coming for work. Its nice to have a gym when youre only in town for 1-3 months. Thanks for everything you added here, this is super super helpful!
- Contractor · Chicago, IL · Member since 2016 · 4k+ posts · 2k+ votes4y
Hey @Luke Stewart -I definitely like where your heads at. I've got both a short-term rental and a mid-term rental here in Chicago. Like others mentioned above STR's have become quite tricky but mid-term is still fair game and not subject to the same restrictions. My STR is Logan Square and does great. The mid-term rental is south of the south loop and also doing quite well.
For the mid-term we are using airbnb 30+ days and also furnished finder is a great website. You might be able to check how much inventory is already in the areas you are looking.
Happy to talk through your plan in more detail and let you know how my experience has been.
Quality Builders4.966 Reviews - Investor · Member since 2022 · 111 posts · 150 votes4y
Quote from @Jonathan Klemm:
Hey @Luke Stewart -I definitely like where your heads at. I've got both a short-term rental and a mid-term rental here in Chicago. Like others mentioned above STR's have become quite tricky but mid-term is still fair game and not subject to the same restrictions. My STR is Logan Square and does great. The mid-term rental is south of the south loop and also doing quite well.
For the mid-term we are using airbnb 30+ days and also furnished finder is a great website. You might be able to check how much inventory is already in the areas you are looking.
Happy to talk through your plan in more detail and let you know how my experience has been.
Thats what I have been using for my place in Denver, furnished finder and Airbnb. It just seemed limited supply and expensive for whats left over. How has our midterm place done throughout the winter?
- 4yBonnie LowPro MemberLender · Asheville, NC · Member since 2016 · 1k+ posts · 1k+ votesFollowing this thread as an MTR investor, too. Definitely interested in any MTR insights you all have.
- Real Estate Investor · Burlingame, CA · Member since 2017 · 2 posts · 0 votes3y
Hey all, great thread - seeking to get into MTR in Chicago as well with somewhat similar story (previously lived there, lots of family there).
- Rental Property Investor · Forest Park, IL · Member since 2018 · 28 posts · 22 votes3y
@Luke Stewart I have 37 mid-term rentals in buildings that I own and operate in the Chicago suburbs. 91% occupied last year. I try to get double the market rent for a furnished apartment. 30 night minimum stay.
- Member since 2021 · 17 posts · 10 votes3y
Following as well. I am originally from Chicago too and just bought a condo there as a second home for personal use. However I found that many buildings also had restrictions on MTR such as limiting number of units that can be rented in the building or even requiring HOA Board approval of potential renters. I may want to rent my place when not using it so definitely interested in this thread. The rest of my rentals are in Phoenix.
- Contractor · Chicago, IL · Member since 2016 · 4k+ posts · 2k+ votes3y
@Luke Stewart our midterm rental did well over the winter, we were near 90% occupancy. We had to adjust our price accordingly, but the location is definitely key here in Chicago like anywhere else.
I have to admit we aren't close to double the rent, like @Kevin Morgan, that's super impressive. We are probably about 1.5X of market rent. @Kevin Morgan are all those MTR in Forest Park?
Quality Builders4.966 Reviews - Real Estate Broker · 3412 S. Harlem Avenue Riverside, IL 60546 · Member since 2015 · 6k+ posts · 5k+ votes3y
@Jonathan Klemm I would love to hear more about midterm.... I haven't found many folks who have had success with it yet, especially at any scale.
@Kevin Morgan are our apartments scattered site, or are they all clustered in one or two areas?
- Lender · Chicago IL · Member since 2020 · 357 posts · 229 votes3y
This is absolutely my favorite rental strategy! I have an MTR in East TN (SFH, 3 bed 2 bath) that stays about 98% occupied. And I apartment hack my 2 bed 2 bath here in South Loop, Chicago. I provide a fully furnished, private bedroom and bathroom in my apartment located in a boutique, mid-rise buiding with 5-star amenities and views of the Park & Lake.
Initially, when I set out on this journey, my goal was to rent to travel nurses. And, while I have had 1 travel nurse so far, my 4 other renters have all been business professionals. 2 from outside the country, 2 from other states. All here for various reasons, but suffice to say, my price point seems to appeal more to business travelers than nurses. :) Now, I also provide a very unique space, being that I'm 2 blocks to the lake and have water views from my apartment. This is a very rare offering from what I can tell (based on my research), and these features in conjunction with the amenities my building offers (you name it we have it) and secured garage parking available (extra $), I am allowed to charge a premium for my rental. EVEN THOUGH IT'S A SHARED SPACE.
I'm constantly amazed at how many people don't mind sharing an apartment! Given, I'm a nice person and a clean roommate (LOL) but they don't know that. Point is, yes, this strategy works and MY place works well for business travelers (individuals) and the occasional medical professional (who--no offense--ALWAYS asks for a discount :). Let it be known that I started apartment hacking in Sept 2022 and have been 95% booked since then. I'm currently booked through July 1, 2023. I was practically fully booked all Fall and Winter. I did raise my prices for Spring and Summer (pool will be open in 1 month!) My bookings usually come in 3-6 weeks ahead of time, which is great as it helps me to plan ahead and is further validation that I'm providing a place of value to people.
I do have small pockets where nobody is here, and that's a nice break for me. I've absolutely LOVED this experience and meeting people from all over the country and world. Not that this is your situation necessarily--I'm not sure if you're going to rent out an entire place or a room--but I thought it was worth sharing.I hope this helps and if you want any more info or feedback, please DM me and we can set up a time to chat!
-Jennie
- Lender · Chicago IL · Member since 2020 · 357 posts · 229 votes3y
Quote from @Luke Stewart:
Quote from @Tom Casey:
Hey Luke!
So the good news is that there are currently two full-amenity condo buildings in/near downtown Chicago in prime A+ Class neighborhoods that allow short-term rentals: 545 N Dearborn and 30 E Huron. However, both associations have a 30-day minimum for all lease agreements.
Unfortunately, the bad news is that there really aren't any other buildings that I know of where the association allows short-term leases. I have done quite a bit of digging and I've been told by multiple agents that these are the only two that don't have rules against STR.
If you're serious about going this route, I believe that these two buildings would be a good place to start.
Also, if you're not completely set on the buildings being full amenity, I agree with @Michael K. that you can find some multi-unit gems in great neighborhoods and operate them as STR buildings. Just be wary that technically, according to Chicago's Airbnb ordinance, you can only operate 25% of the units in your building as Airbnbs. I heard this on Straight Up Chicago podcast episode 143 about rules for STRs in Chicago. Here's a link to that episode if you're interested: https://www.straightupchicagoi...
I think that overall, multi-unit buildings will be your best bet if you don't want to risk getting in trouble with condo associations.
However, if you don't mind taking on that risk, you can also run numbers for condo units so that they still work as regular rentals. Then if the association cracks down, you'll have a backup plan where you still at least break even on PITIA.
Hope that helps!
Tom,
This is great information, thank you. I am definitely focused on 1 month or more rentals, I love the mid rental approach, aiming at people waiting to buy home, people in the city for work, so in that regard it definitely makes the HOA laws more flexible. I am not set on full amenities but I do find that my Denver spot rents constantly and I believe a lot of that is due to the fact that its a one stop shop for people coming for work. Its nice to have a gym when youre only in town for 1-3 months. Thanks for everything you added here, this is super super helpful!
@Luke Stewart as long as you do 32+ days, you can rent on Airbnb Long Term in the city of Chicago. :) That's what I do, and it doesn't require any permit, registration, or license from the city. I also list on Furnished Finder. Each building will have their own stipulations as @TomCasey mentioned, but the 32+ day rule may help to bypass them in certain circumstances.
- Investor · Member since 2022 · 111 posts · 150 votes3y
Quote from @Jonathan Klemm:
@Luke Stewart our midterm rental did well over the winter, we were near 90% occupancy. We had to adjust our price accordingly, but the location is definitely key here in Chicago like anywhere else.
I have to admit we aren't close to double the rent, like @Kevin Morgan, that's super impressive. We are probably about 1.5X of market rent. @Kevin Morgan are all those MTR in Forest Park?
1.5x rent is more what I am finding in Denver, I have never received double rent for my one MTR, and currently setting up another what will bring in about 1.3x rent. I think location is key to a furnished MTR. My newest property will probably be better unfurnished down the line but gonna give it a year and see how it does.
- Contractor · Chicago, IL · Member since 2016 · 4k+ posts · 2k+ votes3y
That makes sense that you are 1.5X in Denver @Luke Stewart, is your vacancy quite a bit higher in the summer? Chicago obviously a bit slower in the winter....this past winter was the slowest it's ever been for us. Time to shift out of short-term rentals maybe.
We do have another property up in Libertyville that we are going to do the short-term or mid-term rental. Location in definitely key....any where a hospital makes a huge difference.
Quality Builders4.966 Reviews - Investor · Member since 2022 · 111 posts · 150 votes3y
Quote from @Jonathan Klemm:
That makes sense that you are 1.5X in Denver @Luke Stewart, is your vacancy quite a bit higher in the summer? Chicago obviously a bit slower in the winter....this past winter was the slowest it's ever been for us. Time to shift out of short-term rentals maybe.
We do have another property up in Libertyville that we are going to do the short-term or mid-term rental. Location in definitely key....any where a hospital makes a huge difference.
Actually summer has always been really busy for me as lots of WFH tenants come to enjoy the mountains. In the fall I always try to get a tenant before thanksgiving as that will go until after new years. I don't mess with trying to find a new tenant around christmas. But I have rarely been vacant more than a few days to a week unless I am in Denver using the home.
- Rental Property Investor · Forest Park, IL · Member since 2018 · 28 posts · 22 votes3y
Quote from @John Warren:
@Jonathan Klemm I would love to hear more about midterm.... I haven't found many folks who have had success with it yet, especially at any scale.
@Kevin Morgan are our apartments scattered site, or are they all clustered in one or two areas?
@John Warren My buildings are small to medium sized buildings in Forest Park, Oak Park, River Forest and LaGrange. So yes, relatively close to each other for ease of management. I pick close-in burbs with good access to public transportation.
- Rental Property Investor · Forest Park, IL · Member since 2018 · 28 posts · 22 votes3y
Quote from @Jonathan Klemm:
@Luke Stewart our midterm rental did well over the winter, we were near 90% occupancy. We had to adjust our price accordingly, but the location is definitely key here in Chicago like anywhere else.
I have to admit we aren't close to double the rent, like @Kevin Morgan, that's super impressive. We are probably about 1.5X of market rent. @Kevin Morgan are all those MTR in Forest Park?
@Jonathan Klemm My buildings are small to medium sized buildings in Forest Park, Oak Park, River Forest and LaGrange. So yes, relatively close to each other for ease of management. I pick close-in burbs with good access to public transportation. - Real Estate Broker · 3412 S. Harlem Avenue Riverside, IL 60546 · Member since 2015 · 6k+ posts · 5k+ votes3y
@Kevin Morgan I love it! You are in my neck of the woods for sure. All great areas you are purchasing in.
- Real Estate Investor · Burlingame, CA · Member since 2017 · 2 posts · 0 votes3y
I recently closed on a building in Wicker Park on Division. Going to test mid-term rentals on a studio unit above a coach house. Will see how it goes.
- Contractor · Chicago, IL · Member since 2016 · 4k+ posts · 2k+ votes3y
Those are awesome long-term areas @Kevin Morgan! I love Chicago and its surrounding suburbs because there are so many great multi-family options!
What's next for you?
@John Griffin - Any idea what you will charge for a wicker park mid-term rental? How large is the studio?
Quality Builders4.966 Reviews - Chicago, IL · Member since 2016 · 5 posts · 6 votes2y
@Jonathan Klemm I'm planning on purchasing a condo in a 4-Unit building in Irving Park area, where rentals are allowed. Given your experience with STR and MTR, would I need any city registration or permits to post on AirBnB as a Midterm rental. Is it necessary to inform the HOA of my plan of doing MTR?
@Jennie Berger mentioned earlier that if you do 32+ days, no permits or license is required.
Also, as listed on Redfin it is a "Fee Simple Ownership", even though it's a duplexed condo unit in a 4-unit building. Does Fee Simple ownership mean you can rent it out STR or LTR or MTR, as long as HOA allows rentals.
- Contractor · Chicago, IL · Member since 2016 · 4k+ posts · 2k+ votes2y
Hey @Pete B. - You can definitely rent out for 30+ days on airbnb with no restrictions from the city of Chicago but not sure if airbnb will let you list if you don't have a license number...curious if you figure that out please share the results.
Fee Simple ownership has nothing to do with what you can do with the property....It means that you own the land and the building on it outright, and you have the right to use and dispose of the property as you please. This includes the right to rent out the property.
HOA is the key along with the city of Chicago.
Quality Builders4.966 Reviews
Join the conversationCreate a free account to reply, vote on answers and follow this thread.