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Should I Buy?

Renting vs. Buying

Buying your own home is one is one of the smartest moves you'll ever make. As a home owner, you'll be able to:

Build Equity - Since your principal balance decreases and your actual cash equity in your home grows over time, your mortgage payments are a sound investment from the very moment you buy. You build cash equity in your home as you pay down the principal on your mortgage and historically, most homes rise in value. When you decide to sell your home, the profit you reap from your home's appreciation is tax exempt up to $200,000.

Stabilize Your Monthly Expenses - Fixed-rate mortgages are more stable than rent, which usually increases annually.

Reduce Your Tax Burden - The interest you pay on your home loan and property taxes is tax-deductible. Profits from the sale of your home are tax free - unlike most other investments.

Exercise Personal Choice - You can decorate and remodel your home to fit your own personal tastes and lifestyle.

Renting Advantages	Renting Disadvantages
Less Work - There is generally less work in maintaining a rental unit Less Cash — You need less cash up front to rent	No Equity — You build no cash equity in the property Lifestyle Limitations - You are limited in property and interior decoration options Lack of Stability — Your rent can rise annually No Tax Deductions — None of your rent is tax-deductible
Buying Advantages	Buying Disadvantages
Equity — You build equity in your home as you pay down your mortgage principal Investment Profit — Most homes increase in value over time Lifestyle Freedom — You can remodel and redecorate to your liking Tax Relief — Mortgage interest is tax deductible, and home-sale profits are tax free	Investment Risk — Property values may decrease Reduced Mobility — You generally have to sell the house before you can move Unplanned Expenses — You are responsible for all repairs and maintenance

Considering Buying a Chicago Rental Property?

Why buy a Chicago rental property? If you pick the right property, you can turn a pretty penny.

It's all about location, location, location. A beautiful property in the wrong part of town won't be nearly as profitable as a slightly less desirable one that sits in a great part of the city.

Being a landlord is a business, so you have to think that way. You are investing in property to turn a profit. You'll need to take a hard look at potential revenues and expenses associated with the property. It not worth buying a rental property is you can't find a way to make it profitable. Here are some things to think about when considering purchasing a Chicago rental property.

What type of building styles should I consider?

It's not always a good idea to but buildings with unique styles. The layout of the building might not be conducive for maximum occupancy. It's better to stick with conventionally shaped buildings. You should consider properties that you would want to live in.

Should I buy a single-family home or a multi unit building?

Single family homes appeal to renters because they get more square footage for their money. Since these homes tend to have a slower turnover rate than multi-unit buildings, it will take longer for your initial investment to pay off. On the other hand, if you decide to sell your single-family home, its resale tends to be greater than multi-unit buildings.

Multi-unit buildings offer a faster return on your investment due to multiple renters living in one building. They have much higher turnover rates opposed to single-family homes. Multi-unit buildings are harder to finance that single-family homes and usually require a minimal down payment of 20%. They tend to be underwritten by relationship based private lenders. Residential multi unit buildings of up to 4 units are more "finance able" and may even qualify for FHA type loan products.

Seriously considering buying a Chicago property?

Thoroughly inspect the property. If it is a multi-unit building, check all the units. Don't just take a look at a representative unit. The rest of the units might not be in the same condition. View the vacancy rate of the building over the past few years. Make sure you leave room in your budget for possible vacancies. Remember that you will also be responsible for building maintenance. Check to see if the building has recently undergone any repairs, or if it is in need of them. The latter could substantially increase how much you have to initially invest into the property.

Is A Fixer-Upper Right For Me? Taking on a Chicago home remodeling project.

Are you ready to take on a Chicago home remodeling project? When a buyer hears that a home "needs some work", it might be more work than they can handle. Others are willing to do the work. This can lead to a big payback in the future. Buying a fixer-upper is not in every buyer's best interest. If you are considering buying a Chicago home that requires some remodeling, consider the following before deciding to buy:

Is the home worth remodeling?

When you view a home, bring a friend along that has some architecture or engineering know how. Not all buyers hire an inspector before they agree on a price with the seller. In regards to a home that you are considering remodeling, it might be worth it to hire the inspector before you start to negotiate the price. Another good idea is to survey the surrounding area. If other homes are well kept, or the area is poised for revitalization, you have a better chance of getting a bigger return in the future.

How much is the home currently worth?

After you've decided what improvements and repairs the property needs, obtain estimates from various contractors. Factor in this amount into the cost of renovating this Chicago home. Compare this figure to the asking price of similar homes in the area. If the cost of the house, with repairs, is lower than the asking price of the other houses in the area, you've got yourself a good buy.

Am I going to have to do a little or a lot of work on the property?

Will the renovations be complete in weeks or months? Minor repairs like new counter tops, fresh paint, or new carpeting is much different than having to re-drywall the entire house. Learn the extent of the renovations before you jump right in. Are you willing to wait months for the repairs to be completed? Are you planning on living in the house during this time?

Can I afford the repairs?

If you don't have enough saved up to cover the cost of renovations, there are some loan options available. Do the math. Don't commit to a project until you know you can afford it. Unless, of course, you like living in a home that's half gutted.

Can I complete the renovations myself?

If the home requires major repairs, make sure you can handle it. You might be able to do the minor repairs yourself, but if you mess up on a major project, it could cost you a lot more time and money that you planned on originally. If you don't think you can complete a project, hire a professional to do the work. Factor the cost of professionals into your estimate of the home's price.

Buying a fixer-upper can be a gamble. You could save yourself some money buying this kind of home, but there is also the potential that you will spend way more than you expected.

First Time Home buyer in Chicago

It's your first big step into real estate. You're buying your first Chicago home. The home buying experience can be extremely rewarding-at last, you'll have your own property where you can paint the walls any color you want! Sure, the process of buying that first home can be frustrating at times, but you will feel a sense of accomplishment and satisfaction when you sign the contract and get the keys to your very first place.

As a first time home buyer in Chicago, you've already pretty much made the decision to take the plunge and join the ranks of happy homeowners in the Windy City. So what's the next step? It's time to find that ideal house, condo, loft or townhome you can see yourself living in for years to come. Perhaps you've already been looking at Chicago listings on the Internet and found a few you like. At this point you are wondering exactly how much house you can afford? It is important for first time home buyers to get pre-approved for a loan so you know just how much you can spend AND so sellers know you are serious about purchasing a home.

Because it is your first time going through the home buying process, working with a real estate agent can be the best way to make sure you are covering all the bases. There is a lot first time home buyers need to be aware of. It doesn't hurt to have a professional on your side, and it doesn't cost anything either. An agent will help you find a lender, locate properties that fit your budget, and negotiate pricing without charging you a penny.