All Forum Posts by: Jacob Dalton

It's a spacious 4br 2.5 bath with finished basement in desirable school district in a B Class neighborhood. Given that and some other characteristics, from what I'm told it would be in demand as far as rental applicants.

Ideally, I would like the option to return to it.

With repair estimate of 1% of purchase price and property management fees, it's pretty much a break even on the monthly overhead. Or without property management fees would be about $200/mo in cash flow. That's aside from a renter placement fee (from a property manager or real estate broker), so with that into account, it could be about $3000 into the red on year one of a rental lease. Obviously if a renter were to stay there for years, that renter placement cost would be spread out and could again get back into break even territory (with some variance due to anticipated rental rates in years to come or the rate of new property tax hikes)

Thank you, Jarret. Appreciate the thoughtful response. There was definitely some detail here for me to dig into.

On the subject of "lease structure and clauses" I did ask the above reference attorney about such matters. I don't remember the precise words, but essentially he claimed that there was some sort of standard rental agreement applicable to the area and he could not (perhaps in reality would not) add anything to it at all, which struck me as oddly questionable. He just told me to read the Cook County Residential Tenant Landlord Ordinance with the idea that doing so should just stop me in my tracks from bothering with rental at all. Not sure if he was just lazy or trying to spare us both a headache.

 

I am hoping for a more insightful response from someone who wants to read the post.

I purchased a single family home good quality location in Chicago’s Northwest Suburbs in Cook County as a personal residence. At the time of purchase, I knew I might not want to stay indefinitely and at some point to might convert the home to a rental property. I also knew Cook County was not in a landlord friendly area. Unfortunately, I did not know the full extent of what I have later come to hear and learn.

It's been a few years and I have now I have decided I want to relocate. I really wanted to convert the residence to a rental property, but everything I have heard about doing so in Cook County has been very concerning. Namely, that if a tenant (in this case accompanied by a whole family) ends up stop paying rent and I would be on the hook for both covering the mortgage and dealing with open ended legal costs and time. Obviously this could happen anywhere but I know it can be particularly bad for landlords in certain places like mine. It’s been estimated by one attorney I spoke with that an eviction in Cook County would take about 6 months. I have even heard of nightmare scenarios that can go far beyond that. Even when talking with some real estate professionals who would seem to have an incentive to help me with renting out my property, I have been met with serious warnings (they pretty much say don't do it). Real estate agents gave me nightmare scenarios. A lawyer gave me nightmare scenarios. Other investors gave me nightmare scenarios. As a would be individual landlord with just a one unit single family property I don’t know I can stomach the risk or withstand a financial assault resulting from an eviction process for a non-paying tenant (or tenants that do extensive damage).

I am seriously considering bowing out and selling. Unfortunately, given current and foreseeable prices and interest rates, I will not be in the position to buy anything else anywhere I’d want to go.  So I wouldn't make a selling decision lightly (or a rental decision) and I am really loathe to give up a good property with a rate that may never be had again. I purchased during the pandemic and got a 3 percent interest on it. Before finalizing a decision to sell, I thought I’d get some thoughts from the BP forum

The only obvious factor I know to try to head off a problem is to carefully screen applicants. I'd like to know if there is any measure or strategy I can do beyond that. As for selective screening alone, even a property manager told me "even doctors sometimes stop paying". I am left to wonder, though some investors with SFR's are doing it successfully, is the risk too high for the reward?

I am asking anyone knowledgeable to provide any measures or strategies that could materially make a difference in heading off the risk of serious financial harm of the eviction process with non-paying tenants. If there are any helpful answers, I believe such responses would also be valuable to others in my position.

Thank You!