Anyway to know if rent will be raised? (Chicago, Lincoln: real estate, apartment)

[tallsauce]

I just learned that Chicago has no rent control laws. Is there anyway when you're looking for a new apartment to have a better chance of picking one where the rent won't get jacked up as soon as your first lease is over? Is this more/less common in certain areas? Other than asking some other tenants how its increased in recent years I don't have any ideas.

[hank0604]

You can pretty much assume that your rent will go up when you renew a lease. In my history as a landlord, there have been very few times where I didn't raise rent. Generally a 5% hike or so.

Of course, in this economy that may not be the case. Renters certainly have the leverage right now when it comes to negotiating rent.

[MovingIL]

Be careful with apartment buildings: After our first year in a building in Streeterville, they wanted to raise the rent by well over 10%; if we were willing to sign a two year extension, they would only require a 5% increase for the second year of the extension. We were out of there - even though we didn't want to move again so soon.
We had more luck with private landlords. They generally want to avoid turnover, and we were able to keep the rents in line with market rents by showing ads for other places in the building. Even got a major decrease one year...

[alwaystraveling25]

I thought I would add my two cents:

My old apartment, where the lease expired in February of 2009, wanted to raise my rent by 40 dollars.

In my current apartment, where I took over someone's lease until June 30, 2009, I received a letter in the mail yesterday with my renewal notice that said that "due to the current economic conditions, rent would not be increasing this year." Hopefully other apartment management companies in the city will feel the same way!

[aragx6]

^^I haven't yet heard on mine, but I am hoping it doesn't raise at all.

[Drover]

You're less likely to get cyclical rent increases if you rent from a mom-and-pop landlord who owns a two-flat or two, for the following reasons: 1) it's more likely to be a supplemental source of income rather than a primary source; 2) chances are they bought the place years ago back when you couldn't give away property in this town, so even if they're still paying on it, their mortgage payment is a pittance compared to what the property is worth today. They don't have to squeeze as much out of you as possible, unlike the management companies that snatched up buildings during the housing bubble and have big mortgage payments to show for it.

The downside to this approach is that there aren't many mom-and-pop buildings left in the "hot" neighborhoods. They sold out while the selling was good, or they just plain couldn't afford the taxes any more. You're more likely to find them in neighborhoods on the fringes of the "good parts" of town, such as up in upper the northwest side.

[Lookout Kid]

Originally Posted by tallsauce

Is there anyway when you're looking for a new apartment to have a better chance of picking one where the rent won't get jacked up as soon as your first lease is over?

Mind reading? A magical crystal ball?

[Avengerfire]

Originally Posted by Lookout Kid

Mind reading? A magical crystal ball?

Diane Warwick.

[UnderTheLiveOaks]

Originally Posted by Drover

You're less likely to get cyclical rent increases if you rent from a mom-and-pop landlord who owns a two-flat or two, for the following reasons: 1) it's more likely to be a supplemental source of income rather than a primary source; 2) chances are they bought the place years ago back when you couldn't give away property in this town, so even if they're still paying on it, their mortgage payment is a pittance compared to what the property is worth today. They don't have to squeeze as much out of you as possible, unlike the management companies that snatched up buildings during the housing bubble and have big mortgage payments to show for it.

The downside to this approach is that there aren't many mom-and-pop buildings left in the "hot" neighborhoods. They sold out while the selling was good, or they just plain couldn't afford the taxes any more. You're more likely to find them in neighborhoods on the fringes of the "good parts" of town, such as up in upper the northwest side.

I'd say the bulk of the two and three flats I've ever looked at or that my friends live in in Ravenswood/Lincoln Square/Roscoe Village, and even the bulk of Lakeview are still family-owned, even if they use leasing companies to fill them. Buying a two-flat with a garden apartment in these areas, and then renting the units out just isn't that strong a money-making opportunity. After you've recovered mortgage and paid taxes, and paid any employees, you'd be lucky to scrape any profit at all.

[Drover]

Originally Posted by CarolinaBredChicagoan

I'd say the bulk of the two and three flats I've ever looked at or that my friends live in in Ravenswood/Lincoln Square/Roscoe Village, and even the bulk of Lakeview are still family-owned, even if they use leasing companies to fill them. Buying a two-flat with a garden apartment in these areas, and then renting the units out just isn't that strong a money-making opportunity. After you've recovered mortgage and paid taxes, and paid any employees, you'd be lucky to scrape any profit at all.

Maybe so, but if you buy a bunch of 'em, then they start to cash-flow. Not to mention a big portion of real estate investment is betting on appreciation, in which case the tenants are mostly there to pay the operating costs.

It has been my experience and basic research that even the two- and three-flats in Lakeview and Lincoln Park (well, mostly Lakeview, I only ever looked at one apartment in LP) were acquired specifically for investment purposes rather than simply being leftover property handed down from the previous generation, even if the owners aren't major management companies. A lot of them are owned by bit players who own a handful of properties here and there, but at any rate a whole bunch of them have turned over within the last 10 years meaning they have big mortgage payments. Rental "bargains" in these neighborhoods are few and far between any more.