Loop / North side condos -- rental policies (Chicago, Fulton: short sales, real estate)

[lostinchicago01]

Hi all,
I am in market to buy a condo and rent it out. I am planning to invest around 200K. I am having hard luck in finding buildings that are in good shape and allow rentals.
Any options that you might know?
Bless you all!

[SmartGXL]

It seems like half the units out there, are in some form of either being upside down, or are in foreclosure/short sale, or were not built well, and are going to have serious maintenance issues soon.

And the units that are NOT in foreclosure/short sale, are part of an Association where half the units that ARE in foreclosure, werent paying their dues, and the Association is close to bankruptcy.

Then you have to throw in, the fact that since the city is broke, the city may be jacking up property tax again soon.

As a result, the housing market there is tricky - really tricky.

[chet everett]

I have never met any real estate investor that has been successful in building much on their "bottom line" through just rent receipts. Most of the increased "wealth" has come through appreciation. Since condos in the Chicago area are notorious for not appreciating at nearly the same rate as detached housing I would recommend that the Op concentrate on that segment. There are good values in many areas around $200K...

[rparz]

Watch out for new construction issues that require special assements on top of already egregious assessments.

Not a fan of condos as income, you don't control your own destiny.

[snoylekim]

There have also been revisions to requirements for conforming mortgages for condominiums that specify no more than x% of units can be rental .. This has caused a lot of associations to revisit by laws and amend to cap rental unit percentages ..some didn't ever allow it , or had a small percentage , but most changes have occurred recently ..if you want to witness a hot debate , here's one to propose .. It's a dual edged sword .. as an owner, I'd like the option to rent the unit out if circumstances suggested , but as a an owner -occupant , there are issues, some annoying, some larger with an increased number of rental units in a property... Once the lending rules tightened up .., you can see why more associations have enacted these changes ( actually most by laws require a 2/3 vote for something this significant .

[rparz]

Once again, you're looking to invest serious cash in this, and the board could vote to pull the rug right out from under you.

[lostinchicago01]

Thanks everybody for your posts.

[loren1983]

Check out Marquette Management/Trio in Fulton Rive District at the border of the loop. Lots of quiet, nice apts and condos there (Fulton St Townhouses, Kinzie Station too) and I know that Trio (we live there) has apts plus 2 condo bldgs adjacent and friends of mine just moved from the apts to rent a condo next door. Newish, like 1.5 yrs old maxx, and great location.

Best

[tcannon2007]

I would avoid short sales. I have a friend who was looking to buy a condo via short sale and he had all kinds of issues. Eventually he found his ideal condo but that was not a short sale.

[koctail]

ummm $200k?? You can find plenty of condos under $50k, i.e 1-bedrooms which are the easiest to rent out... Check out redfin.com and you can search by price range and size.

You actually want to buy in a building with lots of foreclosures, since that drives the price down, which is what you want as an investor. If you are looking to live in yourself, then I can agree it is more desireable to avoid distressed buildings. But as an investor you need to have the opposite mind set.

You will never make any money renting out a 200k+ condo, at best you can break even with your expenses. But with a 50k condo, you can make a few hundred/month.