Profile picture for Samir80

Is buying a condo and renting it out good idea right now, in this economy?

Is buying a condo and renting it out (in chicago downtown) good idea right now, in this economy? with the current interest rates? and especially with the scary looking future of housing market?
  • August 08 2011 - South Loop
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Answers (13)

You need to do your research on the area where you plan on purchasing a condo. If the mortgage will run you several hundred $ more than the rental amounts in the area, you may want to change locations. I've had several clients look into purchasing rental property. Their main issue is the association for the building. The lower units are often mismanaged or undermanaged. Just make sure to do your research (or have your agent do your research) before selecting the area for your investment property.
  • August 20 2011
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You've already received so many helpful replies - but let me pile on by saying that nearly all reports indicate the next few years are going to be good for Landlords. Increased renters/demand, decreased construction/supply = a fairly sustainable endeavor.
  • August 09 2011
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Hello Samir80;
This is a Tremendous time to Buy a condo and Rent it out !
In fact, this type of Investment is Exceptional at this time for several reasons, Prices are at there Lowest Levels in years !
Interest Rates are at their Lowest Levels in Years !
The Rental Market is Extremely Strong !
As the Real Estate Market recovers, you should realize potential gains from your investment.
Of course you must conduct your due diligence and make sure that you can rent according to the Condo Association By-Laws, look at the cash flow from the investment and compare it to alternate investment opportunuties in today's Market, and try to find a condo building that is FHA allowable to give you more flexibility when liquidating your investment.
Good luck Samir80.
I hope this helps, please feel free to contact me with any further questions, or if I may be of any assistance to you.
  • August 09 2011
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Absolutely!  Provided you get a good deal and it provides you with cash flow, doesn't cost you anything to maintain out of the usual turn over items.

Downtown rentals usually fly really fast, it's a great area and very much in demand.  Again, provided it's priced to rent quickly.

I've seen rentals in the $2500+ go within hours and other lower stay on market because the price tag doesn't match the product.  Make sense?

Good luck!
  • August 09 2011
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If you're buying to rent, the potential rental income should be more than enough to cover any potential downturns in the market. If this is not the issue, then it is not worth it. Besides, if you are looking to rent it out, a down market may not be that bad. The fewer people that can buy means the more people that will rent.
  • August 08 2011
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It seems like it should be a good time.  Be careful about the renting restrictions from the condo association.  Also research the issue of whether or not it can go FHA.  Many buyers are choosing this route and many condo associations are not FHA approved.
  • August 08 2011
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I agree that now is a good time to do this as long as the numbers allow cash flow. The rental market is very strong now and will be for the foreseeable future as many folks simply cannot qualify to purchase something of their own.
  • August 08 2011
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yes but make sure you buy it at a price that cash flows. Most people don't realize how much of an ROI you can earn on rental properties compared to the stock market.
  • August 08 2011
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Profile picture for Matt Laricy
Its all relative to the price range you are looking in and how long you plan on holding onto the investment.

Consider a few things: Rents are at a high right now, and the demand for them is crazy. A good rental will rent out in a matter of hours. The bad to remember is that the laws protect the tenants in Illinois.

I dont think the housing market is that scary. Good priced places are selling fast. Places that are overpriced are weighing the market down. If you get a property at the right price, and the number work out well, you could get a good return on your investment. I would be happy to go over in more detail the answer with you. Remember an investment is all about the numbers.
  • August 08 2011
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Yes, if you have the $$ and can keep what you buy for 5+ years (this brutal market will end some day-year), and you can get a positive cash flow then yes it can make sense. However, with the taxes and assessments you will probably need to put more than 20% down for the numbers to work. Not sure I would consider the S Loop although it depends what you consider S Loop because that area was particularly over built and probably will take longer than some other areas to correct.
  • August 08 2011
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Profile picture for gslow1
It certainly depends on your circumstances but we are seeing a huge upturn in rental demands at this time as clients are nervous about buying and would prefer to rent.  It seems as if there are not enough rentals in the areas that our clients are looking at so supply and demand is driving the market.  You should analyze the market in the area that you are considering buying before making a decision.
  • August 08 2011
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Kind of depends on the price of the condo, the rent you can get for it, ALL of the fees such as taxes,insurance, HOA... 
  • August 08 2011
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Lot's of folks are doing that.

Happy funding, Rudi
  • August 08 2011
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