To rent or to buy? (Chicago, Evanston: short sale, foreclosed, lease)

[Ajohnny07]

Hello again everyone!

I appreciate everyone's feedback in the other thread I created about where to settle in the area.

Now, I'm thinking of the pro's and con's of buying, over renting. I know buying a condo is a great long-term investment, but I've got some qualms about the whole process.

To begin with, I know there's a plethora of foreclosed condos out there, but I've been warned to stay away from most stuff that is labeled "foreclosed," or "short sale."

Renting seems easy, especially since my budget is roughly $750, considering I'd be making a little less than $40k a year at the new job.

Does anyone have opinions about the rent-to-own process? Good idea, or waster of money?

I also have been looking at condos on-line; I've seen some affordable ones in the general area of my work and friends:

2041 North Harlem Avenue #1e, Chicago IL - Trulia

3207 North Nottingham Avenue #2B, Chicago IL - Trulia

4121 West Cullom Avenue #3A, Chicago IL - Trulia

http://www.trulia.com/property/30053...icago-IL-60707

http://www.trulia.com/property/30347...icago-IL-60656

Are these prices average for the area? Or, would something be awry with these?

[MannheimMadman]

Well, buying is fine and dandy if you have cash to use for a down payment.

Also, with a condo, make sure you have factored in any assessment fees/HOA fees.

It's definitely a buyers market for people who have cash to buy and are qualified. Whether or not prices will continue to decrease is anyone's guess.

[chirack]

I would rent until I had a better idea of just how stable the job is(My first job was laying off six months after I started..missed that layoff but the point). I would also rent until I got a better idea of the area to make sure I was not getting into a bad deal or an area that is bad or not what I would like.

Now maybe time to buy in general but I don't think anyone who is just moving here should be buying until atleast a year after getting here.

[Humboldt1]

Rent for a minimum of 6 months in almost any RE market to get your bearings on where you want to live and better understand the local markets.

I bought my first place making $43K so it is possible, even with assessments and taxes, but just to make sure I rented a room to have an extra cushion.

Prices are going down in the Chicago area for the next 6-12 months. Most people know this. The debate is about how much they will drop, not whether or not they will and also when things will bottom.

My advice:

Rent for 6-12 months and save up to have decent down payment and then maybe buy if you find a really good deal. There will be lots in the next couple of years.

[nikitakolata]

Originally Posted by Humboldt1

Rent for a minimum of 6 months in almost any RE market to get your bearings on where you want to live and better understand the local markets.

I bought my first place making $43K so it is possible, even with assessments and taxes, but just to make sure I rented a room to have an extra cushion.

Prices are going down in the Chicago area for the next 6-12 months. Most people know this. The debate is about how much they will drop, not whether or not they will and also when things will bottom.

My advice:

Rent for 6-12 months and save up to have decent down payment and then maybe buy if you find a really good deal. There will be lots in the next couple of years.

I think this is solid advice. If you can find a short term lease, then that may be the ideal since it'll give you time to get a feel for the area and also a feel for your job and its stability.

Like Humboldt, I bought my first place when I was making $41,500 a year. It's doable. I had 20% to put down and the monthly payments with taxes and assessments weren't unreasonable at all. I also had a new car and corresponding payments every month of $334.

You can buy a place, but it really just isn't smart to do it until you are sure of the area you want to be in. You can research a forum like this to death, but the reality is that different areas work best for different people. The only way to really know how happy you'll be in a particular neighborhood is to spend some time there, in my opinion.

[Ajohnny07]

Originally Posted by nikitakolata

I think this is solid advice. If you can find a short term lease, then that may be the ideal since it'll give you time to get a feel for the area and also a feel for your job and its stability.

Like Humboldt, I bought my first place when I was making $41,500 a year. It's doable. I had 20% to put down and the monthly payments with taxes and assessments weren't unreasonable at all. I also had a new car and corresponding payments every month of $334.

You can buy a place, but it really just isn't smart to do it until you are sure of the area you want to be in. You can research a forum like this to death, but the reality is that different areas work best for different people. The only way to really know how happy you'll be in a particular neighborhood is to spend some time there, in my opinion.

Thank you very much....I wasn't sure how do-able it was to buy with a salary like mine. And now that I hear taxes are going up everywhere, especially in Chicago...who knows.

[nikitakolata]

Property taxes in Chicago will probably go up, but they're currently much lower than in other towns/counties nearby. Just as an example, my parents' house is worth about the same as mine. They are in St. Charles, out in Kane county, and their property taxes are over $16,000 a year. My taxes are just over $10,000. That's a pretty huge difference considering our home values are pretty much identical.

My property taxes on my condo in Evanston were more than my friend's, who just bought a condo in a nice part of Chicago. I paid like $152,000 for my place and she just bought a place for $218,000. So, yeah, property taxes are one of those things... at least Chicago's are lower for now (once they are the same as everywhere else, my incentive to live here is gone though!).

[CindyStrahota]

There are many Rent vs Buy calculators available on the web. This will also aid you in your decision.

[Irishtom29]

I wouldn't buy in Chicago for a couple of reasons. That the market is still tanking has been discussed. The other concern I have is that the city is going to go downhill with increasing debt, cuts in services, increased crime and social unrest and very heavily increased taxes.

The city has been riding high and putting off paying for it, when the bill comes due property taxes will probably have to pay for much of it what with so much the industry that used to pay for things being long gone. The old Florsheim factory paid more into city coffers as a shoe factory than as unsold loft condos.

I think Chicago is a great place to rent.

[linicx]

Chicago is a great place to live, but I think I would resist any temptation to buy until the dust settles. I suspect Illinois and a lot of other states will look different five years from now.