Best part of Chicago to buy a condo in

[Rahul Balla]

Hi everyone,

My name is Rahul and I live in Chicago downtown. I currently own six properties in Indiana and I'm now looking to buy a condo here in Chicago for personal residence. I know condos might not be the best investment, but I'd rather own something in the city than keep paying rising rent. 

I'm looking for a 2-bed, 2-bath condo priced under $500,000, with a 10% down payment. Since there's a chance I might move away in about 3-4 years, I want to make sure I can rent it out later and cover all my expenses with the rental income.

Can anyone recommend areas in downtown Chicago that would fit my criteria and might appreciate a bit over time? I know condo prices here don't usually go up a lot, but I'm hoping to find a good spot. Also, I do understand that there are many variables to my question such as interest rates, etc but any insight on good areas where rents keep increasing would be appreciated.

Thanks in advance for any advice! Let me know if you need more details.

[Jason Wray]

Rahul,

Have you had a chance to look at Condo's in Lincoln Park, River North or South Loop. There are a few things to be careful for other than location like HOA fee. You also want to know about the HOA in general like the Reserve Account. A Condo's reserve account only has to be 10% of their annual assessment income in order to be a Warrantable Condo for Fannie Mae or in general.

Having the bare minimum can be okay but it also puts them in danger if something should cost the HOA and when that account goes to zero or under 10% they generally raise the HOA fee's. That hurts the pocket and cash flow at the same time and it can get ugly fast if not managed. You also have to look at litigation and if the condo is Warrantable or Non-warrantable.

Non-warrantable requires specific financing and most lenders (Do Not) offer that type of financing approval. At the Bank we do order a Condo questionnaire that asks those specific questions up front during processing but there can be hidden things not seen. There are a lot of condos already on the Fannie Mae approved list for example and that only requires 5% down.

Stay away from anything that is a Co-Op those are a nightmare in most cases and a lot of the Co-ops have by laws that require 25% down for example even if you qualify for 3-5% down. My corporate office is right in downtown Chicago we have seen condo purchase go out over the last 12-18 months. If you have any questions feel free to reach out I enjoy helping and talking REI.

[Paul De Luca]

Quote from @Rahul Balla:

Hi everyone,

My name is Rahul and I live in Chicago downtown. I currently own six properties in Indiana and I'm now looking to buy a condo here in Chicago for personal residence. I know condos might not be the best investment, but I'd rather own something in the city than keep paying rising rent. 

I'm looking for a 2-bed, 2-bath condo priced under $500,000, with a 10% down payment. Since there's a chance I might move away in about 3-4 years, I want to make sure I can rent it out later and cover all my expenses with the rental income.

Can anyone recommend areas in downtown Chicago that would fit my criteria and might appreciate a bit over time? I know condo prices here don't usually go up a lot, but I'm hoping to find a good spot. Also, I do understand that there are many variables to my question such as interest rates, etc but any insight on good areas where rents keep increasing would be appreciated.

Thanks in advance for any advice! Let me know if you need more details.

 Some neighborhoods with high appreciation rates:

Loop, Lincoln Park, West Town, Lakeview.

[Jonathan Klemm]

What's up @Rahul Balla!  First of love that you know what you want and are okay with it "not being the best investment".  I see a lot of people self-sacrifice, which I try to avoid along the journey to the top.

If you aren't stuck on staying downtown Chicago, I'd consider finding a condo along the Blueline, but it would likely be in a smaller building (2-4 units.  Also, consider Lincoln Park, Lakeview, or Roscoe Village.

Another place a bit more off the beaten path would be Lincoln Square; people love that area and keep appreciating.

[Crystal Smith]

Quote from @Rahul Balla:

Hi everyone,

My name is Rahul and I live in Chicago downtown. I currently own six properties in Indiana and I'm now looking to buy a condo here in Chicago for personal residence. I know condos might not be the best investment, but I'd rather own something in the city than keep paying rising rent. 

I'm looking for a 2-bed, 2-bath condo priced under $500,000, with a 10% down payment. Since there's a chance I might move away in about 3-4 years, I want to make sure I can rent it out later and cover all my expenses with the rental income.

Can anyone recommend areas in downtown Chicago that would fit my criteria and might appreciate a bit over time? I know condo prices here don't usually go up a lot, but I'm hoping to find a good spot. Also, I do understand that there are many variables to my question such as interest rates, etc but any insight on good areas where rents keep increasing would be appreciated.

Thanks in advance for any advice! Let me know if you need more details.

I recommend The Loop & Lincoln Park.  See data in the link below.

https://mred.stats.10kresearch.com/infoserv/s-v1/o5UC-nx0

[Rahul Balla]

Thanks a lot guys! Appreciate it. What do you guys think about River North? Specifically west of LaSalle and south of Chicago Ave. I do not like the area close to Michigan Ave because it is too commercial and noisy. West of LaSalle seems a little quieter and more residential. And I thought the Kingsbury area was pretty good as well. What do you guys think?

@Crystal Smith thank you for providing that data. It was insightful. Do you have similar data for River North and West Loop?

[Gabe R. Gonzalez]

@Rahul Balla I love River North. I was in Gold Coast for a while and would always head down to River North to go out with friends. I'm in Bridgeport now because I wanted a yard and cheap parking :) 

There's always something to do and somewhere to eat around in River North.  

Things can get hectic down there, but if you're committed to City living, you can't go wrong with River North. I also think you could easily find what you're looking for in the Gold Coast - which is a little less hectic than River North and gives you that Lincoln Park vibe as well. 

Now, I've done a few condo deconversions. Be very careful about buying anything built before the 1970s. There are many buildings with systems reaching the end of their life - Galvanized hot water risers, leaking vent stacks, aging window systems, outdated elevator and fire safety equipment. Any one of these could and regularly trigger a special assessment.

Due your due diligence and welcome to the City! 

[John Clark]

Quote from @Rahul Balla:

Hi everyone,

My name is Rahul and I live in Chicago downtown. I currently own six properties in Indiana and I'm now looking to buy a condo here in Chicago for personal residence. I know condos might not be the best investment, but I'd rather own something in the city than keep paying rising rent. 

I'm looking for a 2-bed, 2-bath condo priced under $500,000, with a 10% down payment. Since there's a chance I might move away in about 3-4 years, I want to make sure I can rent it out later and cover all my expenses with the rental income.

Can anyone recommend areas in downtown Chicago that would fit my criteria and might appreciate a bit over time? I know condo prices here don't usually go up a lot, but I'm hoping to find a good spot. Also, I do understand that there are many variables to my question such as interest rates, etc but any insight on good areas where rents keep increasing would be appreciated.

Thanks in advance for any advice! Let me know if you need more details.

Don’t assume you will be able to rent out the condo. There are usually limits on the percentage of units that can be rented out. Also, investor dominated buildings tend to be poorly run. They don’t like paying for properly funded reserves.

Finally, Chicago has  a $1 BILLION deficit this year. And it will get much worse (office values have collapsed) both from pure economics and idiotic social policies. Stay away from Chicago unless you are required by your employer to live in Chicago.

[Gabe R. Gonzalez]

@John Clark I tried forgetting about that huge deficit lol. Now that I have skin in the game, I'm definitely feeling the policy decisions impact me more so than ever. 

Kinda convenient that they're reassessing taxes this year as well, right?