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East Chicago Rental Market Yah or Nay?
Hello BP and NWI investors!
Hopefully my questions will be fairly straightforward and easy to answer.
I’ve done a decent amount of research on Northwest Indiana, however I still have some gaps on East Chicago. Mostly the regarding the rental demand.
How hard is it for you to find tenants? What is your typical vacancy? Can you attract quality tenants?
Thank you for any insights!
Hey @Sean McKee - I don't know that area super well, but I know @Eudith Vacio has some units in East Chicago as @Paul De Luca mentioned.
I will just say the real estate market in general is softer and then includes rentals.....not nearly as many people move in the winter and in general during a slower economy. Our approach has always been to provide a high-quality product slightly below the top of any specific market for rent.
Do you have units you are trying to fill or just looking as a potential investment in the future?
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Quote from @Jonathan Klemm:
Hey @Sean McKee - I don't know that area super well, but I know @Eudith Vacio has some units in East Chicago as @Paul De Luca mentioned.
I will just say the real estate market in general is softer and then includes rentals.....not nearly as many people move in the winter and in general during a slower economy. Our approach has always been to provide a high-quality product slightly below the top of any specific market for rent.
Do you have units you are trying to fill or just looking as a potential investment in the future?
I’m looking for as a potential future investment. I’ve mapped out Hammond pretty well, but would like other options in NWI. My main concern was higher than ~6% vacancy and lack of demand. I’m used to relatively low vacancy markets
Hey @Sean McKee I want to preface this by saying, I don't own any units in EC myself but just judging by how many units are always available in EC I would say vacancy may be a concern.
Quote from @Mitchell Roadruck:
Hey @Sean McKee I want to preface this by saying, I don't own any units in EC myself but just judging by how many units are always available in EC I would say vacancy may be a concern.
There is a lot of variation in the neighborhood in East Chicago. One area may be a war zone, where another might be OK. If you know the area, I think you could make it work. East Chicago isn't very different from Hammond or Gary, all depend a lot on you knowing the neighborhoods.
I don't think you'll have a lot of issues getting tenants, though make sure you screen them well. Your vacancy would be heavily dependent on your ability to screen well. if you have good screening, and you didn't buy in one of the bad parts of East Chicago, you should be able to get some fairly stable tenants.
Quote from @David Hedges:
There is a lot of variation in the neighborhood in East Chicago. One area may be a war zone, where another might be OK. If you know the area, I think you could make it work. East Chicago isn't very different from Hammond or Gary, all depend a lot on you knowing the neighborhoods.
I don't think you'll have a lot of issues getting tenants, though make sure you screen them well. Your vacancy would be heavily dependent on your ability to screen well. if you have good screening, and you didn't buy in one of the bad parts of East Chicago, you should be able to get some fairly stable tenants.
Thanks for the information. Do you know the most stable parts of East Chicago?
The area used to be $30-50k for houses and now its triple that price. I have driven through recently and does not look like much has changed since when houses were 1/3 price. Might be some good sec 8 opportunities if thats what looking for.
Have you looked at Brighton Park? Prices higher but rents are high and properties do cashflow. Tons of demand from solid working class tenants which is more my niche and what most of my BP clients tend to go for, you can also self manage easily these tenants so gives numbers a boost.
Hey Sean, I have a 3 unit building in East Chicago that have been long term tenants for 3 years and I also work with plenty of out of state investors looking to purchase to rent in the area. I bought my property back in 2020 and to @Henry Lazerow point, the values there have nearly tripled. When I purchased my property, my tenant mentioned that there was hardly and rentals in EC & still most of the rentals go pretty quickly. My property is in the Harbor, which most people would say is the worse area but my block is really really good.
It's actually fairly easy to get tenants however you do want to screen them well. South Hammond is another great rental market, as well. I think more and more people are moving into these areas especially from Chicago. It is a thing right now.
Quote from @Sean McKee:
Quote from @David Hedges:
There is a lot of variation in the neighborhood in East Chicago. One area may be a war zone, where another might be OK. If you know the area, I think you could make it work. East Chicago isn't very different from Hammond or Gary, all depend a lot on you knowing the neighborhoods.
I don't think you'll have a lot of issues getting tenants, though make sure you screen them well. Your vacancy would be heavily dependent on your ability to screen well. if you have good screening, and you didn't buy in one of the bad parts of East Chicago, you should be able to get some fairly stable tenants.
Thanks for the information. Do you know the most stable parts of East Chicago?
Nothing I could share offhand. I'd go drive the areas your looking at. East Chicago is one of those areas where you want to drive around to not just look at the house you are interested in, but also houses within the neighboring blocks. You need to be sure that if gangs are tagging houses with graphite it's getting removed quickly. you also want to make sure that your not buying on a block where there is a lot of gang activity. Along with this, driving the area gives you an idea how safe the neighborhood is and how well others in the area maintain their property. If there are a lot of other houses that aren't well kept up, I wouldn't buy even if it was a nice house. If you don't feel safe in the neighborhood, don't buy, your tenants won't feel safe either and you'll have high turnover and trouble finding tenants, along with that, you may have to show up at some point to look at something.. not something you want to do if you don't feel safe in the area.
The other option is doing what some people I know have been doing in Gary, find a way to buy up all the houses on a block. That way you have control over who lives there, and can quickly remove anyone who is causing trouble. This isn't really an option though if you only have a single house.
Northwest, Indiana is a great area to acquire investment property. I am a realtor that closed on several investment properties for my great clients!
Finding tenants is very easy if you have the right variables working for you and to produce solid cash on cash returns!
Quote from @Henry Lazerow:
The area used to be $30-50k for houses and now its triple that price. I have driven through recently and does not look like much has changed since when houses were 1/3 price. Might be some good sec 8 opportunities if thats what looking for.
Have you looked at Brighton Park? Prices higher but rents are high and properties do cashflow. Tons of demand from solid working class tenants which is more my niche and what most of my BP clients tend to go for, you can also self manage easily these tenants so gives numbers a boost.
Funny you mentioned it. Brighton Park is another area I'm actively looking at as well. It looks like a solid area.
I manage dozens of doors in EC. Here's the good- they are relatively easy to fill if you price isn't stupid high. In the summer and fall, we filled stuff in days there. October and on, things slowed some but that's seasonal and a local management company flooded the market. We still got a lot of stuff filled quickly. Prices are still cheap compared to other areas so ROI is still attractive. The bad- old buildings with old building problems. Just factor in higher maintenance costs. The code guys are jacks too. They'll tag you for trash that blew in your yard. They're suppose to give 10 day warnings but they'll sit on it a week before they mail it. My cleaning lady does weekly rounds to clean stuff to avoid their nonsense. Most of EC looks the same to me.
Hammond is another good rental market but at a higher price point. Gary is Gary. It's literally block by block.
Good luck