Rent an Apartment or a Condo? (Chicago, Union: real estate market, 2009, apartments)

[millennialmom]

My daughter (and roommate) will be moving to Chicago around June 1, 2009 to begin their professional careers. They are looking to rent a 2Br/2Bath. Max Budget is appx $2,000 - $2,300/month. One will be commuting from Union Station every morning to the suburbs so they will need to be close to the L; the other will be working in the Loop. I'm thinking Loop, River North, Gold Coast as possible locations to rent. They will not have a car (at the apt/condo). Given the real estate market, I'm interested in your opinions on whether they should look to rent an apartment or a condo. Who would you recommend that they engage locally for their search? Thanks!!

[chet everett]

You'd be nuts to buy a condo in any of those areas right now, but six months out things could firm up a bit. Not saying that things will necessarily improve, just instead of 'quicksand' of falling prices and INCREASED supply that is still not fully absorbed there might be a more clear picture of what the future trends will be.

That said, I would think that your daughter and her roomie are looking pretty far upmarket. Rentals for over $2000/mo are luxury/near luxury. If she and her roomie are both making over $40K/year right out of school and have no need to pay down debts, they could almost certainly choose to SAVE THOUSANDS per year and still live in a very nice safe apartment...

[snoylekim]

For the area the OP is desiring ( Gold Coast, West Loop , South Loop , Near North) , that amount isn't far off for the monthly rent on a 2 Bedroom because almost everything in those areas are 'upmarket' .. Pure rental buildings will be a bit less ( 17-1900/mo for a two bedroom), condos for rent start there and go up, but might be more negotiable ...

[millennialmom]

Chet Everett, I hope you are right (that they can save thousands). They've both worked hard and are fortunate enough to have very well-paying jobs and no debts. Believe me, if they can get something for less, I'll be pushing for that. As you know, my daughter will be parking her car in the suburbs so she will have some expense on that end, too. I was thinking a condo might be a little more negotiable, given market conditions, and that they could get a little more bang for the buck. My impression was pretty much what snoylekim said. I didn't quite realize that 1,700 - 1,900 would get them a "nice," safe apartment. My daughter is doing her research, I'm doing mine and then we can compare notes; ulitmately it's her call. We'll be doing an apt hunting trip sometime in Jan/Feb so we are tyring to zero in on places to consider/visit.

[long101]

I think that 1700-1900 is still on the high side for a 2br in a safe neighborhood. If your looking in the gold coast or certain parts of lincoln park that may be on but there are many other parts of the city that are safe and you can get a 2br for 12-1500. I would assume that they are in their low 20s and would want to go out and experience the city quite a bit. And with a $1000 monthly rent payments they wont be able to have as much fun as theyd like. Just my .02

[chet everett]

There are probably some indivual situations (foreclosure or busted contract sales) where you could get a deal on condo, but you'd need to scramble and/or luck into something. Not saying that you can't find any deals, but coming to town looking for that would be a mistake.

Rentals are generally predictable and in good supply. When you own a place, even if your actual purchase price was a fraction of others, you could hit with some killer property taxes. Many of the condos in the areas you mentioned are going to have killer HOA fees too.

If each of the them is only shelling out 700-900 / mo that is going to leave them with around $4k/saving a year on rent alone. Frankly I think you can do even better...

[millennialmom]

I appreciate your feedback. It's pretty clear that we should stick with pure rental options. So, if one wants to be within 10-15 minutes of Union Station, using the el, what are some good neighborhoods beside River North, Gold Coast and Loop? long101, they are young 20somethings and when they aren't working hard, I have a pretty good notion they are playing hard. Would you recommend using an apartment finding agency or are we better off approaching individual buildings on our own? Again, thanks for sharing your perspectives !!

[chet everett]

The apartment hunting services are taking a cut that the landlords and property managers are generally happy to pay, but there is nothing magic about what they do -- you can easily check the listings on line via the The Reader, SunTimes, Tribune/Metromix/Apartments.com as well as specialized publications.

The "combo commute" to the 'burbs that your daughter is anticipating is something that a few regular posters on the forums routinely do -- I believe they live in the hipper areas like Wicker Park or Bucktown. Those are more of a commute on the El/CTA than 15 mins from Union Station, but might be more inline with their entertainment tastes.

The areas of the close-in west Loop and UIC area have quite a few rentals, as does the massively overbuilt South Loop -- some of the close-in stuff is literally walking distance from the train station. Most of the developement north of China town are in the "walkable and safe" category, but there are some blocks that are much better than others.

Even if you use a service you are going to need to get out the maps and plot out where the grocery is and the routes to transit -- the service is nice as they can save a few phone calls, but to rely on them and NOT double check on your own would be a mistake.

[long101]

You could also look at Lakeview, Tri Taylor, South Loop... After you find your areas that theyd be interested in I would either use an apartment agency or craigslist, it will help you cover a lot of ground. Rather then walking around to a bunch of buildings asking for a tour. Everytime I have rented it has been a condo and Ive found them through craigslist.

[chet everett]

Originally Posted by long101

You could also look at Lakeview, Tri Taylor, South Loop... After you find your areas that theyd be interested in I would either use an apartment agency or craigslist, it will help you cover a lot of ground. Rather then walking around to a bunch of buildings asking for a tour. Everytime I have rented it has been a condo and Ive found them through craigslist.

I think there is the potential to get a pretty good condo rental from craigslist.

Many of the folks that put listings on the free services are willing to negotiate on price, though I suspect most of them are less than responsive when it comes to "hey landlord I need the fridge/toilet/heat fixed" kind of issues. If it is a newer building hopefully such things never come up...