Men, women and children; here’s a newsflash: the Chicago property market is hot right now. They are the words of Haris Ahmed, who has put his head on the block of the subject and made the claims.
Then again, when one looks at the numbers, these claims are hardly surprising. In comparison to markets like Removille, it’s clear that Chicago is booming right now. Bearing this in mind, if your investment company has charged you with finding new property, this guide is all about what to look for in Chicago to ensure that you have paid the right amount.
Let’s now delve into some of the best ways to help you.
The neighborhood matters
Unfortunately, this first point is something that you simply have to rely on with instinct. It means that experienced investors tend to have more knowledge of how to assess a neighborhood, but let’s provide some actionable tips anyway.
Firstly, the quality of your neighborhood dictates the types of tenants you will be attracting. For example, if your property is of the block of the university, it stands to reason that most of your tenants are going to be students. This might mean that during the summer months you will suffer from vacancies, which you will have to build into your budget.
What schools are nearby?
This is in a similar vein to the previous point we looked at.
If you have found that a lot of the potential tenants in the neighborhood are families, it goes without saying that schools is going to be high on your agenda.
If you know that a new school is going to be built, there’s every chance that this is going to boost the value of your property significantly. Families are happy to pay big bucks to stay in a good schooling area, so if there is any inclination that a property’s educational links are on the rise it is only going to benefit you.
At the same time, the opposite can of course occur. If schools are closing, performing badly or just don’t exist, it’s going to limit your potential.
How many other listings are nearby?
This is one of those issues that you should really look out for and fortunately, it only takes a quick drive to get a taste for it. If you drive through the neighborhood and find that there are a lot of listings or vacancies, it can suggest that things have suddenly taken a turn for the worse. It can also sometimes mean that the area is quite seasonal, which is what occurs with student zones as we have already discussed.
It’s worth mentioning that if there is a lot of seasonality in the neighborhood, this is going to affect your rents. Generally, landlords are able to bump up rents when there are low vacancies, but they have to lower them if there are a lot. As such, make sure you again build this into your budgeting.