South loop condo, or suburban house? (Chicago, Arlington Heights: real estate, rental, HOA)

[silvertonesx24]

Sorry for the double post, just realized that I posted this in IL and not Chicago where it is more relevant

My wife and I are contemplating whether or not to stay in the city for a little longer and buy a 2/3br condo in the South Loop, or leave for a large house in the suburbs. We have a newborn so we're about 3-5 years before needing some serious space. Schools aren't a consideration other than property value.

Specifically, we're looking at the Wells St area / future Riverline district. Values in the area have held steady and not grown much over the past few years, which is concerning for our short outlook. With so much development there and so many units coming on the market in this area, is that good or bad from an ownership perspective?

Only interested in purchase options as I'm tired of paying rent and have the cash to buy.

[BRU67]

I personally believe that being sick of paying rent is not a good reason to buy a property. The trouble with buying a condo when you don't want to pay rent is that you often end up with an assessment that amounts to a rent payment, or gets you very close. I found that's especially true in those cool loft buildings in the South Loop. You also have to deal with a homeowners' association who may or may not let you rent out or AirBnB your condo when you outgrow it and you can't sell it for what you owe because the market has turned down.

The trouble with buying a house is that homes in desirable suburbs around here are expensive and highly taxed, and areas that are still affordable may entail a gamble that might not pay off. Homes cost money to maintain and always tempt you to add upgrades. Most nice upgrades will be hard to recoup later unless you get lucky and the suburb goes up in value. What suburbs are you looking at?

[silvertonesx24]

Well the thing is that I have plenty of cash and income to be able to afford a property, plus with an infant the whole "rental" life isn't really appealing so why not at least get something out of it. I've been renting in a condo building for several years anyway and the owner is coming back to the property so we have to find something new. You're right, $15k/yr in HOA and taxes is annoying, but either that or $15k/yr in taxes

Suburbs- Arlington Heights, Barrington, Crystal Lake- must be on UP-NW line. I'm not too concerned with short term suburban home values- we'd be there for many years. I'm more concerned with short term condo values should we stay in the south or west loop for a few more years.

[damba]

Originally Posted by silvertonesx24

Well the thing is that I have plenty of cash and income to be able to afford a property, plus with an infant the whole "rental" life isn't really appealing so why not at least get something out of it. I've been renting in a condo building for several years anyway and the owner is coming back to the property so we have to find something new. You're right, $15k/yr in HOA and taxes is annoying, but either that or $15k/yr in taxes

Suburbs- Arlington Heights, Barrington, Crystal Lake- must be on UP-NW line. I'm not too concerned with short term suburban home values- we'd be there for many years. I'm more concerned with short term condo values should we stay in the south or west loop for a few more years.

It would be helpful to know your actual housing budget (in your other thread too). Otherwise, we are guessing as to what may fit.

Cheers

[silvertonesx24]

Budget up to $600k, more comfortable around 400-500 range though

[ParkerP]

Originally Posted by BRU67

I personally believe that being sick of paying rent is not a good reason to buy a property. The trouble with buying a condo when you don't want to pay rent is that you often end up with an assessment that amounts to a rent payment, or gets you very close. I found that's especially true in those cool loft buildings in the South Loop. You also have to deal with a homeowners' association who may or may not let you rent out or AirBnB your condo when you outgrow it and you can't sell it for what you owe because the market has turned down.

The trouble with buying a house is that homes in desirable suburbs around here are expensive and highly taxed, and areas that are still affordable may entail a gamble that might not pay off. Homes cost money to maintain and always tempt you to add upgrades. Most nice upgrades will be hard to recoup later unless you get lucky and the suburb goes up in value. What suburbs are you looking at?

The bold is spot on and I agree 100%. I became a homeowner only to discover how much I can't stand it lol. Expensive lesson learned indeed.

[BRU67]

Originally Posted by silvertonesx24

Well the thing is that I have plenty of cash and income to be able to afford a property, plus with an infant the whole "rental" life isn't really appealing so why not at least get something out of it. I've been renting in a condo building for several years anyway and the owner is coming back to the property so we have to find something new. You're right, $15k/yr in HOA and taxes is annoying, but either that or $15k/yr in taxes

Suburbs- Arlington Heights, Barrington, Crystal Lake- must be on UP-NW line. I'm not too concerned with short term suburban home values- we'd be there for many years. I'm more concerned with short term condo values should we stay in the south or west loop for a few more years.

What is the difference between "rental life" in a South Loop condo and life when you've bought the same unit, other than the fact you're taking on a big financial obligation that might be difficult to liquidate? I just think with your 3-5 year time line, a condo makes no sense whatsoever.

While I agree with the idea that you should get something out of it, there's no guarantee you'll get anything out of owning a property. In a red hot market, it's hard for someone without experience to imagine an adjustment occurring. They just want to buy, buy, buy! But trust me, it can adjust, as anyone who lived through the dot.com boom or 2008 real estate crash can attest.

[damba]

Originally Posted by silvertonesx24

Budget up to $600k, more comfortable around 400-500 range though

You are in really good shape at that price point. You should be able to find a SFH relatively close to Metra that has some updates. In addition, you will be saving some money by taking advantage of high quality schools nearby paid via your property taxes. No need to go private to avoid some CPS headaches.

[silvertonesx24]

Well by rental life I mean having the lease expire with an 8 month old because the owner wants it back, that isn't fun.

Maybe we're better off looking at duplexes and shared condo buildings if we want to stay in the city for the shorter term. A lot more to the purchase price and a lot less to the HOA.

[emm74]

I am not a Chicago person so I can't comment on that aspect. But as a parent, I'd say go ahead and move to the suburbs now if that's where you want to raise your family. Get to build your community with your neighbors now - your son will have friends he grows up with, and you and your spouse will have a circle of friends nearby to share good times with, and to help each other out when you need last minute childcare or help with something around the house, etc.

No need to buy something just to sell 3-5 years from now, when you are in a position to buy for the longer term.