How good is the Chicagoland RE market?

Question

I've been trying to decide where to buy property, and am coincidentally moving to the Chicagoland area soon.

I know that Chicago in particular has some problems. High debt, corruption, and is losing population. Also the crime

However, it appears to have a quite a few positives. It is DRASTICALLY cheaper than others cities its size. I found plenty of sub 300k apartments/ houses in Chicago, which is simply impossible in LA/NYC/SF. The cashflow is decent as a midwest city, and there are some really nice suburbs as well.

I'm mostly concerned with the future of Chicago, and if it will continue losing population, or if things are expected to reverse/ level out over time. What are your thoughts?

Eric M. · Answer

I moved to chicago 32 years ago. People were saying the exact same stuff then. Doom and gloom about all the supposed problems. And the problems are real. And Chicagoland has done nothing but boom despite them. The economy grows,  prices rise, investment money flows in, people move here, people start and operate successful businesses here. Downtown Chicago has bounced back after the pandemic as well as just about any city I have been to...and better than most.

because problems are the norm. Everyplace has their own problems. No place is immune. There is no utopia. Plenty of people have and will make plenty of money in Chicago real estate.

People have very skewed memories. Anyone complaining about crime now must have slept through the 70s 80s and 90s. People complaining about corruption now are hilarious. Do they forget the Daley's or the string of governors who went to jail?

Visit the city. You will feel a vibrance not felt in many places. all the naysayers have been consistently wrong for many decades. Odds are they are still wrong.

Michael K. · Answer

@Tyler D. First of all, welcome to Chicago! A couple of things, (FYI I was born and raised in the city, then lived abroad for 5 years but eventually decided to come back) Chicago is the Midwest's foremost metropolis, and probably always will be. As a result, it suffers from some of the same issues the Midwest does as a whole, and for the past few decades has not seen the same kind of growth as other parts of the country i.e west coast and sunbelt. That said, you can absolutely make money by investing in real estate here (I personally do multifamily buy and hold investing). So if you have a good job and enjoy living here you should definitely consider picking up a property if that's something you're interested in.

John Warren · Answer

@Tyler D. I think the issue here is that a lot of the advice is more geared towards people that can/want to buy institutional grade assets. If I was looking to acquire 300 unit complexes, then I would probably look in other areas since you get on sight management, leasing and maintenance in that type of complex. Most real estate investors are looking for a 1-4 unit deal, and in that space the profitability of the deal is going to be very much tied to whether you are a good operator or not.

The other side of this is that Chicago is loosing population... but it is massive compared to most cities in the USA. The suburbs sprawl for a good 2 hour drive if you go from one end to the other, and when you get to the end on the north you hit... another city!

If Chicago is where your family or career take you, then get to know the areas and invest with confidence.

Account Closed · Answer

@Tyler D. I’m no real estate investor, YET. But I do know a few things about living in Chicago as a resident being born and raised here. Pingree Grove is an upcoming Northwest Suburb (45 to an hour outside of Chicago) expected to increase in population significantly in the next 5-10 years. Chicago’s crime rate is 50%+ contributed to, by the far South Side which as of now doesn’t seem to be a place many people if any would like to invest yet. Rolling Meadows and Arlington Heights are two surrounding suburbs directly next to eachother, which is currently a more pricier area with doubts of decreasing anytime soon. A plus to those two suburbs is that the Chicago Bears have recently placed a bid to buy the Arlington Heights race track in hopes to turn it into the new Solider Field, this will be a process which takes a while as the Bears are currently still under contract with Soldier Field (Chicago) until 2033 which some talk has began about the contract being bought out if the inquiry for the Race Track goes through. I hope this feedback helps! Best of luck!

Aaron Zimmerman · Answer

I personally think the best strategy would be a house hack. It's tough to lose because you're saving money on rent, building equity, getting tax benefits along the way, and becoming a more skilled landlord assuming the property is purchased correctly. You absolutely have to be aware of local laws so familiarize. Also, tune into the meetup groups to broaden your network. Feel free to PM and I can send you them.

Jonathan Klemm · Answer

@Tyler D. - I am going to 2nd @Eric M.'s post!  The people who are doing all the talking about Chicago do not always seem to be the ones investing.  A lot of picking a market has to do with your overall strategy and game plan.

Chicago is great for single-family and small multi-family with a plethora of old inventory continually being rehabbed.  Like you mentioned you can find any price point you desire within 30 minutes of the city center.

I personally think you can make good money doing real estate anywhere with the right team who understands the market and your overall strategy.

Allan C. · Answer

@Tyler D. Chicago is a great city but REI is challenged there. Market growth is low compared to rest of nation and CRLTO favors tenants heavily. Housing is cheap because it factors in the risk, like any efficient market.

Most newbies don’t factor the property tax hike when purchasing in this inflated market, so I advise to double check your tax assumptions.

Crystal Smith · Answer

We have a love/hate relationship with Chicago. Hate the politics, hate the corruption, hate some of the negative things you mention in your post. I can't comment on whether or not any of that will reverse but I will comment on is that as long as Chicago has the following it will always remain a place for commerce which then supports Real Estate. Since Chicago's inception it has been a transportation hub; first it was the lake; then trains; then airports. That unique combination is why Chicagoland is the 3rd largest MSA. The majority of our business is here because it's a hub. And like NYC in the early 70's it's too big to fail.

Will we eventually establish roots to either permanently live someplace else or become snow birds? The answer is yes- but we'll always maintain business in Chicago.

How good is the Chicagoland RE market?

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