Success with Chicago Condo Rentals?

[Derek Luttrell]

Hi All, 

I wanted send a beacon out to fellow Chicago investors and ask if anyone has a portfolio of condos within the city, since single family hardly exists out here. I know the popular opinion is that special assessments can wipe out cash flow, not all associations allow renters, association policies can suddenly change, but I successfully house-hack through roommates in my Ukrainian Village condo right now (I'm 25 so for now it feels weird NOT to have roommates), and for my first true investment property I want to stay close to home (no more than 20 minute drive/public transit). 

I have a pre-approval with my lender with stipulations that the building can't be over 50% tenant-occupied, and at least 10% of the monthly HOA dues need to go into reserves. Does anyone reading have a few successfully rented Chicago condos under their belt? The rental market is great in this city, and I'd really like to invest close to home as I love it here and don't see myself leaving anytime soon.

[Daniel F.]

@Derek Luttrell I think it depends on your time horizon. If this is a property you're thinking of buying and holding for the long haul, maybe worthwhile on doing the 15 year route and sacrifice that marginal cash flow you'll get today while building up equity way faster. 

If it's more like a 5 year hold, you need cash today, and think that extra cash flow will help continue a goal in mind of buying more properties, then 30 year maybe not be bad either. 

Point being, a lot of people forget to factor in the equity piece and if you're buying this thing for the long, 15 year isn't a bad idea if at the end of the day your monthly cash flow is marginally different and won't have an impact on your bottom line.