Even if you’re not in the market for a move and are happy just where you are, Chicago’s current real estate market is enticing more and more to become landlords. Real estate investors. People who buy real estate not to flip but to hold long term for appreciation and having someone else pay your mortgage for you. Have you thought about investing in Chicago real estate and if so, what are some of the considerations?
Cash Flow. There’s no reason to buy real estate for the long haul if you’re going to have to spend more money each month than you get back. Occasionally that will happen at some point if your property is currently “in between” tenants but there’s enough on someone’s plate other than being upside down on a rental house. The first consideration is whether or not you’ll cash flow each month after your purchase, and with interest rates where they are today, that’s easy to do.
Management. One aspect of being a landlord is that you’re, well, a landlord. You can remember when you rented your first apartment and the garbage disposal quit working? Or there was no hot water? Of course, you called the landlord. When you own property and manage real estate, you will at some point be asked to fix something. Yet that’s not a feature unique to a rental; every home at some point needs maintenance. However, if you’re not in the mood to fix a tenant’s shower over the weekend, you can always hire a management company that will take care of everything from vetting tenants to unclogging drains.
Property Type. Rentals aren’t immune to various types of property, location and function. Is a downtown condo a good idea for you? How about a loft near one of the universities? Do properties near an eL line command more rent than others?
As with any real estate purchase, there are a myriad of considerations. If you’d like to know if you’d make a good landlord, call me. Let’s talk about the possibilities. With the combination of real estate prices bottoming out while mortgage rates are still low, it might be the best time ever in Chicago to become a landlord.