Investing in rental properties in Chicago can be a very lucrative business. The real estate market in the city presents an amazing opportunity for investors. With the ever-growing population, the demand for rental housing is high and you can expect good returns from your investments.
But before you venture in, here are the three key things you should know when investing in Chicago’s rental properties:
Chicago Rental Property Laws
Being unaware of the landlord’s responsibilities and rights under Chicago’s law could result in significant issues, both legally and financially. As such, it’s vital to get to know the area-specific laws, including the Residential Landlord Tenant Ordinance (RLTO), especially if you’re a first-time rental property investor.
Rental Properties Cost More
Rental properties are an excellent source of income. However, the idea that the investment is simple and doesn’t come with added costs is a fallacy. In fact, investment property mortgages are typically costlier as there are more risks involved. There are also the usual real estate transaction fees - title, origination, and attorney fees. Moreover, you should factor in property tax, insurance, improvement expenses, and still have emergency funds put aside to cater to any unexpected costs.
Single-Family Home Vs. Multi-Unit Building
Single-family homes tend to appeal to renters as they enjoy more square footage for their money. They also have a greater resale price should you decide to sell. However, since these properties have a slower turnover rate, it might take longer for your initial investment property to pay off.
On the other hand, multi-unit buildings have a faster ROI and higher turnover rates due to the option of having multiple renters. But they’re harder to finance, and typically require a minimal down payment of 20%.
Invest In Rental Properties in Chicago!
If you need help, have any questions, or are interested in investing in rental properties in Chicago, don’t hesitate to reach out. You can contact us at Ian Nelson | Real Estate via phone at (773) 420-8045.