Downtown Chicago Midterm Rentals

[Luke Stewart]

I am looking to buy a condo in the city using a second home loan. I know all the second home loan requirements so no need to hash that out here. I am more interested in people who do midterm rentals, anything over 1 month, fully furnished. I grew up here and when I came to the city as a travel nurse this summer, the month to month furnished rentals were outrageously expensive, $4000-$5000 a month easily to be in a nice building anywhere in River North, Gold Coast, Lincoln Park, West Loop etc. I have done multiple calculations and it seems like that market has great cashflow... in the summer. Does anyone have experience to share about this specific rental in the city throughout the year? Pros and cons. Is gym or parking a huge plus? I always view midterm renters people who want all the amenities. It seems like a great market for that despite the property taxes. Any advice is greatly appreciated!

[Ruth Garcia]

Hello all! 

I am new to the group as I am just starting out as a MTR investor. However, @Luke Stewart hopefully I can add some value here regarding your question about Chicago winters and getting more bang out of your rentals. 

I've been in the hotel business in downtown Chicago for over a decade and I can tell you there is A LOT of business here. Summer or winter it doesn't matter. The key is not necessarily to fill your MTR with true leisure business coming in, go after businesses that have business travelers coming in and out of these downtown offices. Since you are focusing on 30+ days walk into the lobby of an extended stay hotel (Homewood Sweets, Extended Stay America, Choice Hotels with Extended stay etc.) and look for the reader boards. These are boards in the lobby where they will put the name of companies that are having meetings in the hotel. They will generally put the name of the company on there and you can use that as a target list and start dialing for dollars. 

Another thing to consider is the compression that is coming into the area. For instance, Choose Chicago (I used to work for them) is the marketing arm for the city and they drive huge pieces of business that will drive hundreds of people into downtown selling out all the hotels and driving prices crazy high. I've seem people pay $700+ a night over Lollapalooza. This also happens in the winter as well, just depends on what is going on in the city. The sales people will layer these types of conventions so that the hotel community stays full as much as possible. There will be gaps of course, but I would suggest that you use this to your advantage to max out your rental potential in advance. 

Hope this helps!