Should I Buy An One Bedroom Condo In Lincoln Park? (Chicago: apartments, renters) - Illinois (IL) - Page 2 - City-Data Forum

GolfLover2 · 03-13-2014, 09:58 AM

Calculators are fine ... but I'd suggest talking to a Mortgage Lender for a more precise assessment of your costs of financing and monthly payments. Especially with condos and first-time buyers this is a valuable action to take. There's no cost to talking to the Lender, as most provide FREE Consultations of this kind. A very wise thing to do prior to entering a search for a home too. You'll be needing a Pre-Approval for a Mortgage to make an offer on any purchase anyway. Shout out should you need a referral. Best of luck to you ...

Carson9 · 03-13-2014, 10:09 PM

Quote:

Originally Posted by jman07

Why are you posting here? There are own vs rent calculators everywhere on the internet. Your taxes, interest, and fees will be more than your rent in the city. And your supposed to stay In A HOUSE for at least 5 years if you buy one. Probably longer for a condo in chicago.

This is a pretty broad generalization, and given the current state of the real estate market, incorrect in my opinion. Pending on your down payment, I see many situations where it is cheaper to buy vs. rent, especially when you take the tax benefits into consideration. Chicago rents have skyrocketed in the past few years, which has been encouraging many renters to look into buying, as after they run the numbers, it either turns out pretty equal or cheaper. Also, with interest rates still pretty low and home prices not too outrageous, I think now is the perfect time to buy property in Chicago if you can swing it.

jman07 · 03-15-2014, 06:06 AM

Quote:

Originally Posted by Carson9

This is a pretty broad generalization, and given the current state of the real estate market, incorrect in my opinion. Pending on your down payment, I see many situations where it is cheaper to buy vs. rent, especially when you take the tax benefits into consideration. Chicago rents have skyrocketed in the past few years, which has been encouraging many renters to look into buying, as after they run the numbers, it either turns out pretty equal or cheaper. Also, with interest rates still pretty low and home prices not too outrageous, I think now is the perfect time to buy property in Chicago if you can swing it.

Right. Nice post with absolutely nothing to back it up. It can only sometimes come out as equal when you only include your mortgage payment and nothing else. HOA fees alone are $400 a month. Property taxes 8k a year. Taxes and non refundable fees of at least 3k with a real estate transfer tax of 2k. Not to mention that about 90% of your payments your first years go to pay interest on the loan and not to the principle. Now is always "the perfect time to buy." Please. There would be no renters if buying was equal or cheaper.

frank60657 · 04-27-2014, 04:28 AM

I have been in the market to buy a condo for the past few months, and I DO believe that right now it is more economically sound to buy than rent. In most low rise buildings, monthly assessments are under $300. Only in a high rise will you experience a monthly assessment far north of $300 (due to amenities, maintenance, personnel expenses, etc.) I actually saw a listing for a 2,000 sq ft high rise condo going for $120k with a monthly assessment of $1,750. It's been on the market for nearly a year and though the Seller has consistently lowered the list price, no one will touch it. Buying that condo would be (well like) renting - money spent without gaining equity.

We are talking condo here - property taxes are less than what you would pay for a detached unit. Contingent on the neighborhood, most annual property taxes for a 1,250 sq ft condo are south of $5k. Additionally, you have the incentive of deductibility.

The rental market is saturated in Chicago, still resonating from the 2008 housing debacle. Demand is great, overtly inflating monthly rates. Bake in the monthly rental rate for parking and you're spending at least $1,800/mo for a 1 bed 1 bath. Sure there's the safe harbor of a short term commitment, but you're not building equity and you're paying an over-valued monthly rate.

On the buy side, interest rates remain low (though, expect an uptick in rates due to the Fed's decreased buying of MBS.) Housing values will continue to normalize as inventories deplete. Overall, housing values have increased by 14% year-over-year. At some point, new housing will list at the eventual normalized value.

Now is the time to buy and lock in a low interest rate before the Fed increases rates over inflationary concerns. Home values will continue to be on the upswing before hitting a normalized ceiling. As for me, I am waiting for bank approval on my offer to buy via short sale.

Best of luck!

treemoni · 04-27-2014, 11:09 AM

*waits for chet*

chet everett · 04-27-2014, 01:25 PM

Here is the rent vs buy calculator that I have found offers the best combination of very detailed "advanced settings" so you can factor in all the things like HOA fees, renters insurance, costs associated with locating an apartment / selling a home, lots of options for tax implications, inflation and of course baseline appreciation / deflation. -- http://www.nytimes.com/interactive/b...ator.html?_r=0

My personal intuition is that folks that buy without having a fairly long time horizon (5-7 years...) rarely do better than renters unless they buy a place that is underpriced due to needed work / distressed seller...

GolfLover2 · 04-27-2014, 02:41 PM

"There would be no renters if buying was equal or cheaper."

Not true. There would be more buyers and fewer renters if everyone had the ability financially ... and credit-wise ... to buy. Many are renting because they have no other choice, not because they don't want or hope to buy.

But that said, buying is NOT for everyone ... or in every situation ... for a variety of reasons. You're completely right about that. And with mortgage financing being so detailed these days, a simplistic online calculator or a calculation that does not include ALL parts of the financing equation, tells you little at best ... and provides inaccurate information at worst. To gain the information and facts needed to make a fact-based decision, you should talk to a Mortgage Lender. It's typically FREE to do so, so why not do it??

BleedCubbieBlue · 04-28-2014, 04:05 PM

Only buy if the price is low. If not priced correctly you might end up losing money on the transaction. Will you pay less in mortgage than in rent? if so, buy. If not, then rent.

jman07 · 04-28-2014, 07:41 PM

Quote:

Originally Posted by GolfLover2

"There would be no renters if buying was equal or cheaper."

Not true. There would be more buyers and fewer renters if everyone had the ability financially ... and credit-wise ... to buy. Many are renting because they have no other choice, not because they don't want or hope to buy.

But that said, buying is NOT for everyone ... or in every situation ... for a variety of reasons. You're completely right about that. And with mortgage financing being so detailed these days, a simplistic online calculator or a calculation that does not include ALL parts of the financing equation, tells you little at best ... and provides inaccurate information at worst. To gain the information and facts needed to make a fact-based decision, you should talk to a Mortgage Lender. It's typically FREE to do so, so why not do it??

If one has the financial ability to rent and buy for $1000 a month, they would choose to buy. Therefore, there would be no renters if they were equal. Point being, buying is not equal to or cheaper than renting.

Also, common sense tells you that if renting and buying were equal, investors would buy condos and rent them out so that the renters would pay down the investors mortgages giving them one hefty return. Sorry, but I just proved you wrong.

BleedCubbieBlue · 04-29-2014, 08:29 AM

Quote:

Originally Posted by jman07

If one has the financial ability to rent and buy for $1000 a month, they would choose to buy. Therefore, there would be no renters if they were equal. Point being, buying is not equal to or cheaper than renting.

Also, common sense tells you that if renting and buying were equal, investors would buy condos and rent them out so that the renters would pay down the investors mortgages giving them one hefty return. Sorry, but I just proved you wrong.

Buying requires more than just an investment of money. It also requires an investment of time. A lot of renters dont want to commit to a location/property for more than a few years. Typically when buying, you have to commit at least 5 years to see any financial gain. The first few years of a mortgage are pure interest payments. But if you plan on staying at least 4-5 years, then yes buying makes a lot more sense. You get your money back at the very least when you sell. you will never get your rent money back. And getting a mortgage isnt possible for everyone. you have to have a solid financial situation and a steady work history. You cant be jumping around from hipster bar to hipster bar as a bouncer and get a mortgage. Just works that way.