How are Chicago investment properties performing in 2018? Should you buy real estate investment property in Chicago? Read on to find out.
Knowing where to invest in real estate is everything. That knowledge could pave the path for your real estate investing career. Making money in real estate depends on a couple of different factors. Location is definitely one of those factors. That’s why we’re talking about Chicago, the third largest metropolitan area in the U.S. Is this currently the best place to invest in real estate? Let’s get into the facts.
The Chicago Real Estate Market 2018
Chicago real estate investors are in luck. Chicago’s large population, diverse economy, and stable market all contribute to its attractiveness. Being successful in buying an investment property and having it be one of the best real estate investments is all dependent on the economy that investment property is in. When you buy real estate investment property, there are certain factors which determine its profitability. Things like performance, occupancy rates, and cash flow are all affected by economic conditions and market trends of that specific real estate market. Chicago real estate investors know this. And we want to share with you the reasons behind why the Chicago real estate market is at its hottest right now. Here’s why you should invest in Chicago real estate.
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High Rental Demand
This is one of the best reasons to buy real estate investment property in Chicago. Over 50% of Chicago’s population rents. This large pool of renters has created high rental demand in the city, which means high rental income. Everyone’s opting for renting instead of buying these days, and people are willing to pay the rent.
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Reasonable Home Prices
You’d think such a populous city would have property prices through the roof considering the level of demand. However, because of the increase in renters rather than buyers, the demand for houses for sale is slowly decreasing. People at all income levels prefer renting than buying. Less demand means a slower rise in home prices. After all, if people aren’t buying houses at their current prices, they definitely won’t be buying them if prices go up. So the market adjusts home values in accordance to demand. This is great news for real estate investors in Chicago. Buy real estate investment property and rent it out.
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Job Growth
The first thing you notice when you look at the city of Chicago is all the corporate headquarters it holds. Chicago’s labor pool is the largest in the nation. There has been a recent trend of companies moving their headquarters to the Chicago metro area. These companies bring along with them their employees. This steady increase in jobs has definitely contributed to an increase in rents.
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Popularity of Luxury Rentals
Like we said, people at all income levels are opting to rent rather than buy. According to Crain’s, the number of upper-income households in Cook County that rent has nearly doubled over the past ten years. If you want to buy real estate investment property in Chicago, consider luxury rentals. Chicago has a booming supply of high-end rentals, especially luxury apartments downtown.
Chicago Real Estate Analytics 2018
Before you buy real estate investment property anywhere, you should always check its real estate analytics. Data is king in today’s world and having accurate and reliable data can make your real estate investing decisions a lot easier. Mashvisor’s investment property calculator allows you to analyze investment properties with the click of a button. Our calculator also provides a detailed neighborhood analysis for any neighborhood in any city. So let’s see what data our tool has collected for the Chicago real estate market in 2018.
Chicago Real Estate Market- City Level
- Median Property Price: $446,995
- Monthly Traditional Rental Income: $1,866
- Monthly Airbnb Rental Income: $1,714
- Traditional Cap Rate: 0.71%
- Airbnb Cap Rate: 0.59%
- Traditional Cash on Cash Return: 0.71%
- Airbnb Cash on Cash Return: 0.59%
These are all the average numbers based on the data collected from real estate property listings. Our calculator provides real estate analytics on both traditional rentals and Airbnb rentals. Airbnb Chicago is currently less attractive on the city level, but let’s get into our neighborhood analysis for Chicago’s real estate market to get a clearer picture.
Best Neighborhoods in Chicago- Where You Should Buy Real Estate Investment Property
The following is a list of the current top-performing neighborhoods in the Chicago real estate market 2018.
West Loop Gate
- Median Property Price: $367,868
- Monthly Traditional Rental Income: $2,512
- Monthly Airbnb Rental Income: $3,312
- Traditional Cap Rate: 1.19%
- Airbnb Cap Rate: 2.28%
- Traditional Cash on Cash Return: 1.19%
- Airbnb Cash on Cash Return: 2.28%
- Airbnb Occupancy Rate: 54.9%
Goose Island
- Median Property Price: $511,867
- Monthly Traditional Rental Income: $2,710
- Monthly Airbnb Rental Income: $2,941
- Traditional Cap Rate: 1.71%
- Airbnb Cap Rate: 1.16%
- Traditional Cash on Cash Return: 1.71%
- Airbnb Cash on Cash Return: 1.16%
- Airbnb Occupancy Rate: 52.57%
Cabrini Green
- Median Property Price: $511,344
- Monthly Traditional Rental Income: $2,763
- Monthly Airbnb Rental Income: $3,291
- Traditional Cap Rate: 0.6%
- Airbnb Cap Rate: 1.06%
- Traditional Cash on Cash Return: 0.6%
- Airbnb Cash on Cash Return: 1.06%
- Airbnb Occupancy Rate: 51.85%
Fulton River District
- Median Property Price: $469,579
- Monthly Traditional Rental Income: $2,402
- Monthly Airbnb Rental Income: $3,029
- Traditional Cap Rate: 0.41%
- Airbnb Cap Rate: 1.00%
- Traditional Cash on Cash Return: 0.41%
- Airbnb Cash on Cash Return: 1.00%
- Airbnb Occupancy Rate: 54.87%
To start your search for investment property in Chicago, click here.
Should You Buy Real Estate Investment Property in the Chicago Real Estate Market 2018?
The Chicago real estate market is a prime market for investors looking to buy real estate investment property where the return on investment is high (and likely to improve). It’s the most affordable of the large metropolitan cities and is ranked at the top of many real estate investor lists. Chicago has got a deep pool of potential tenants at all levels of the market. The opportunities presented are endless. With the right resources by your side, you’re guaranteed the best real estate investments. The Chicago real estate market could be holding your next investment property so start your search now.
Not interested in the Chicago real estate market? That’s fine, there are plenty of other amazing locations for you to buy real estate investment property in. Use our property finder tool to start your search for real estate investment property anywhere in the United States. To start looking for and analyzing the best investment properties in your city and neighborhood of choice, click here.