Single family house rental market at Naperville and Aurora (Chicago: real estate, rentals)

[tiyakhambadkone]

Hi All,

Our single-family house is located in Aurora, IL (School District 204) near Stonebridge community.
We are planning to move to another state around the spring/summer of 2023 and we are not sure if we should sell or rent.

The reason why we would even consider renting:
1. The mortgage rate on the house is pretty good compared to the current market mortgage rate
2. We want to invest in a rental property

What we don't know:
1. How is the rental market for single-family houses in this area?
2. What are the pros and cons of renting a single-family house?
3. If the rent is above $4k then are there any takers?

[Hiruko]

Originally Posted by tiyakhambadkone

Hi All,

Our single-family house is located in Aurora, IL (School District 204) near Stonebridge community.
We are planning to move to another state around the spring/summer of 2023 and we are not sure if we should sell or rent.

The reason why we would even consider renting:
1. The mortgage rate on the house is pretty good compared to the current market mortgage rate
2. We want to invest in a rental property

What we don't know:
1. How is the rental market for single-family houses in this area?
2. What are the pros and cons of renting a single-family house?
3. If the rent is above $4k then are there any takers?

The rental market is strong, but the bulk of your prospective tenants will be either corporate relocations or people trying to time the market. These are tenants who will likely be relatively short-term—one or two years—rather than five to ten years. This means that you will need to factor in commission (typically one month's rent) to be paid on a more regular basis than properties at a lower price point. If you opt for the property to be professionally managed, you will need to see what local property managers are charging, usually a percentage of the gross rent each month. By far, my best cash-flow rentals are in the suburbs.

Mod cut.

[tiyakhambadkone]

Originally Posted by Hiruko

The rental market is strong, but the bulk of your prospective tenants will be either corporate relocations or people trying to time the market. These are tenants who will likely be relatively short-term—one or two years—rather than five to ten years. This means that you will need to factor in commission (typically one month's rent) to be paid on a more regular basis than properties at a lower price point. If you opt for the property to be professionally managed, you will need to see what local property managers are charging, usually a percentage of the gross rent each month. By far, my best cash-flow rentals are in the suburbs.

[Snip.]

Thanks. So a good size single-family house (Aurora Naperville area) has no takers in the long-term rental market?

[Hiruko]

Originally Posted by tiyakhambadkone

Thanks. So a good size single-family house (Aurora Naperville area) has no takers in the long-term rental market?

In my experience, the suburban dynamic is the exact opposite of the city. In the city, the higher the monthly rent, typically the longer people stay. In the suburbs, the higher the monthly rent, the shorter people stay because they want to buy a home. I recommended someone with rental expertise to talk to, but it just got deleted as "advertising."

[Avondalist]

One factor to consider is that home prices in the Chicago area have hardly declined in the past year, because the 2020-2021 runup was more muted here. Other cities are seeing big declines.

This would be a good time to sell in Chicagoland and buy in another state because the difference between the two will be favorable compared to years past, and compared to years future. Owning real estate in slow-growing Illinois is not as good as elsewhere, and now is a good time to minimize the opportunity cost loss.

Of course interest rates are the problem. But if you can afford to buy elsewhere I would do so. Interest rates will eventually fall. As they say in real estate, "date the rate and marry the price."

[Rikki Tikki Tavi]

Make sure you check with your HOA. Many HOA Law Firms and Boards see this trend developing and are writing new rules into the covenants about rentals. They want to see the lease, they will only allow so many rentals in the subdivision, they want to restrict how many people live in the house, etc.

[GWoodle]

Originally Posted by tiyakhambadkone

Hi All,

Our single-family house is located in Aurora, IL (School District 204) near Stonebridge community.
We are planning to move to another state around the spring/summer of 2023 and we are not sure if we should sell or rent.

The reason why we would even consider renting:
1. The mortgage rate on the house is pretty good compared to the current market mortgage rate
2. We want to invest in a rental property

What we don't know:
1. How is the rental market for single-family houses in this area?
2. What are the pros and cons of renting a single-family house?
3. If the rent is above $4k then are there any takers?

Since you are moving out of state you probably should sell it. You can't be absentee landlord. Now if you could sell to family member you can trust could be different.

Pro's & con's involve having a good tenant that doesn't trash the place then leave. Single family home probably too small for a rental agency company. In the agreement you may have to set some reasonable standards for upkeep. If it ain't your grass would you bother to mow it or what does it cost to have firm come & do the work. Sometimes for rental market you become the handyman for minor repairs. With you in another state who keeps an eye on it? Even in a condo association they may need you to come fix it.

[Di3s3l_Pow3r]

Originally Posted by GWoodle

Since you are moving out of state you probably should sell it. You can't be absentee landlord. Now if you could sell to family member you can trust could be different.

Pro's & con's involve having a good tenant that doesn't trash the place then leave. Single family home probably too small for a rental agency company. In the agreement you may have to set some reasonable standards for upkeep. If it ain't your grass would you bother to mow it or what does it cost to have firm come & do the work. Sometimes for rental market you become the handyman for minor repairs. With you in another state who keeps an eye on it? Even in a condo association they may need you to come fix it.

Totally agree. Difficult if landlord is out of state. Every small issue becomes a bigger problem.

A close family member moved to CA and decided to rent the condo. Eventually he sold it because was too much headache with bad tenants (balcony caught fire due to smoking which was not allowed, and numerous HOA complaints)

[Hiruko]

I don't agree with this at all. There are property management firms and absentee owners maintaining single-family homes all across this country, and doing it well. In the last three years, large firms have been the biggest purchasers of single family homes for rent. There are local property managers here that specialize in managing small holdings.

[Di3s3l_Pow3r]

Originally Posted by Hiruko

I don't agree with this at all. There are property management firms and absentee owners maintaining single-family homes all across this country, and doing it well. In the last three years, large firms have been the biggest purchasers of single family homes for rent. There are local property managers here that specialize in managing small holdings.

yes but it costs money. In the end, everything is possible if money is not an issue. OP should do the math.