Millions of Americans look at buying real estate each year, and thousands of those home buyers are looking at the Chicago area. Potential investors in Illinois may wonder, “is Chicago a good place to invest in real estate?” When looking for a home or a property, the buyer may have criteria that he or she is trying to find to fit his or her needs. When searching for the perfect place to buy, knowing more about the area can help narrow down a decision. With a city as large as Chicago, this can help cut down time looking for the perfect property and allow for the buyer to begin the negotiation process.
Is Chicago a Good Place to Invest in Real Estate?
Home value has risen more than 34% over the last five years, and is on an upward trend to continue to do so in the future. This makes real estate investment in Chicago a good idea, as over 50% of the houses in the metro area are rentals. Rental prices range from neighborhood to neighborhood but are between $1,000-$6,000 depending on how large the rental is and how affluent the area is. If the buyer has enough money to get into the limited market, then he or she may be able to enjoy long-term success as a real estate investor.
Buying properties and turning them into rentals may not be for everyone, or may seem like a daunting undertaking, but this can be a steady stream of income for years when done correctly. The buyer can look up what information he or she may want about a certain property and what is around it on the city’s website to learn some basics about it and if it is the right fit for his or her investment needs.
A Booming Economy
Chicago is made up of almost 2.7 million people, making it a thriving community of diverse cultures and opportunities. Chicago is also what is known as a port city for the Great Lakes and the Mississippi River, making it a hub for the industry. There are many career opportunities that continue to bring people to the city. The diversity of the city, also makes it a great place to find investment opportunities in real estate.
There has been an upswing in recovering neighborhoods that have needed some work or renovations. Knowing the areas of the city is helpful when investing in real estate in Chicago, as it’s important to know what areas offer the most potential value for their price.
More and more people are moving to Chicago each year, making it harder to find houses. This means that prices are higher than they have been in the last few years. This is good news for any sellers, as they will get more for their house than they would in previous years. For the buyers, however, it is common across the city for bidding wars to occur or for a house to be under contract after only a few days of being listed. Inflation will also continue to play a part in the prices, as the higher it gets, the harder it will be to find a lower interest-mortgage rate.
A Rental Hotspot
Because Chicago has grown so quickly over the last five years, there is a limited housing market. This scarcity drives up the price of the houses that are available and can mean that many families are able to afford to buy a house. This creates a continuous need to rent homes. Houses listed may only be available for a few months, and some rental areas can list a property and have a renter the next day. This makes investing in houses to turn into rentals a promising venture in the current market. Chicago investment properties are a good place to start investing if a buyer is able to find and purchase a house in a preferred neighborhood.
Good information to have prior to buying property in Chicago is the characteristics of different areas of the city. Some areas may be expanding quicker than others, making them more desirable to invest in. Besides the Metro areas, some other good neighborhoods are:
- Roger’s Park is one of the best for both renters and buyers overall, as it is a great location that offers restaurants and culture without being in the middle of the city.
- Humboldt Park offers excellent opportunities for investors, as it offers lower and mid-range prices, making it a hot area with a lot of purchase competition.
- Logan Square is an older neighborhood that can be considered historical, which can appeal to some buyers and renters and can provide lovely scenic views with tree-lined streets and older architecture with different-sized houses for different needs.
- Bronzeville is a growing neighborhood that is closer to the green line and can make commuting to work easier. This is known more as an up-and-coming area.
- Avondale has many types of housing options and is known for its excellent school districts, which can make this area preferable for families or a couple that is trying to grow their family.
- The Loop is in the center of the city and might offer the widest range of entertainment and shopping.
Investors should avoid real estate investment scams that might involve sellers who do not disclose accurate information. Buyers should be knowledgeable about information regarding certain rules and regulations that are in place in some of these neighborhoods that could affect renovations for remodels and other zoning issues. If an opportunity seems like it might be too good to be true, then it is important to slow down and do some research. A little research can help any potential buyer from real estate investing nightmares that become money pits. Working with an experienced attorney to secure an investment property can help buyers avoid these common issues.
