Should you rent or buy in Chicago?

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September 18, 2020
best real estate in chicago

These are the pros and cons of renting and buying in Chicago, so you can choose what is best for you.

As Chicago is one of the largest cities in the United States, it’s no surprise that many people move to the city yearly. As of 2019, there are 2,693,976 people living in Chicago.

So where are people moving to Chicago from? In 2018, the top cities that were moving to the Windy City are New York City, San Francisco, Pittsburgh, Houston, and Los Angeles. This means many of the people moving to Chicago are also from some of the country’s highly populated cities.

Why do people move to Chicago?

What makes Chicago so special and why do people want to live there? First off, Chicago has lots to offer in terms of job and career opportunities. This is because the city supports a wide range of industries. This includes finance, art & entertainment, technology, education, health, and much more. 

In fact, Chicago has one of the highest GDPs with $689 billion in 2018. Moreover, the city is home to some of the largest corporations in the U.S. This includes Boeing, Allstate, Exelon, McDonald’s, and United Airlines.

Chicago also supports a wide variety of lifestyles. This includes a vibrant nightlife for the younger population, green spaces for those who enjoy nature, family-friendly entertainment, hub for sports, and much more. Not to mention the city is a melting pot and home to many cultures and lifestyles which is reflected through its arts, entertainment, and restaurants.

renting in chicago should you
701 West Jackson Boulevard, #102 West Loop, Chicago

How renting an apartment in Chicago works

If you’re new to the apartment hunting process, then it can be a bit overwhelming. Let’s walk through the process of renting a house in Chicago. First, the start to renting an apartment is finding one you like. You can easily search through apartments on Localize.

If you have specific needs, you can easily filter through listings. Simply adjust the price range, add in the number of beds and baths, and any amenities you want.

Not only that, but Localize lets you filter through neighborhood needs as well! You can filter for listings that are in a low crime neighborhood, near highly-rated schools, is in a dog-friendly area, is near parks, and will give you a short commute time. With all these filter options, you’ll find your perfect home in no time.

Keep in mind that once you are interested in renting an apartment, the landlord will ask you for a background check and credit check. Many times they will also ask you for several paystubs, your current bank statement, and statement from your employer about your salary.

Once you pass your background and credit check, next comes the lease agreement. Be sure to read through this and discuss with the landlord anything you are concerned about. This could be how the payment for utilities will be distributed or the move-in and move-out dates.

The move-in date is especially important as it may not always be the same as the lease start date. This is because the landlord will clean, repair, and paint the apartment after the previous tenant moves out. However, if the apartment is all ready but your move-in date still isn’t for another week, you may be able to negotiate with the landlord to move your things in earlier.

what is better renting or buying in chicago
4848 North Sheridan Road, #409 Uptown, Chicago

Renting in Chicago

Knowing the type of apartment or home you want is just one step of the home hunting process. Another important factor is knowing what you can afford to pay monthly for housing and budgeting your expenses. So what do the average rental prices in Chicago look like?

The average rent for an apartment in Chicago is $1,943 with an apartment size of 749 sqft. However, the price of rent can vary depending on which neighborhood you are looking at. For instance, the average rent in River North is $2,600 while the average rent in Hyde Park is $1,447. So you’ll be able to find an apartment that fits your monthly budget easily. Keep in mind that the areas around Downtown Chicago could be more expensive to live in compared to other neighborhoods.

renting vs. buying right now
680 North Lake Shore Drive, #1105 Streeterville, Chicago

How buying a house works

Now that we’ve talked about how renting works, how does buying a house work in Chicago? Is it more complicated than renting? Purchasing a house can be a long and confusing process for some so we’re here to break it down for you.

First off, you can find a house to purchase on your own or with an agent. If you are a busy person and are unable to take any time out of your day to look through listings, then hiring an agent to find potential homes for you can be a good idea. 

However, if you want to save some money and home hunt yourself, you can easily do so with Localize. Just as you can add in your apartment and neighborhood filters when renting, you can also do that for home buying. With our tools, you can easily narrow down the hundreds of listings to find one that fits you best.

Before you start your home search, it can be a good idea to get a loan pre approval and discuss how much you can afford to pay for a home. As you may not be able to pay with cash for your home, finding a great lender can make the home hunting process a lot easier.

Once you find the perfect home, the next step is to make an offer. If you’ve hired an agent, they can help you put together your negotiations and guide you through the process. Once your offer has been accepted, you will need to then hire a professional inspector to check out the home and make sure there aren’t any serious issues with the home. If you find there are any large problems with the property, you can either ask the seller to fix it before closing or renegotiate the asking price for the home.

When negotiations are finally settled after the inspection, you will need to review and sign the contract, pay the down payment, and submit a mortgage application. Right before the closing, another walk through is needed to make sure all the requested repairs have been done and the home is in good condition. Lastly is scheduling and attending the closing. 

apartments for rent in chicago
731 West Buckingham Place, #11 Lakeview, Chicago

Buying in Chicago

Just as any other real estate market in the U.S., Chicago’s market has its ups and downs. Knowing that, is it a good time to buy in Chicago right now?

Just as NYC has a competitive housing market, Chicago does as well. Currently, the average sale price for all of Chicago is $335K at $223 per sqft. Keep in mind that prices may vary depending on the neighborhood and area you are looking. For instance, the more populated downtown areas may be more expensive compared to neighborhoods further away. 

In addition, a report from Attom Data Solutions found that it is more affordable to rent than buy in Cook County in the current market conditions. This can be great news for those who are already renting in the city. However, this can change in the future or near-future depending on the overall economy and market.

best place to live in chicago
1526 West Monroe Street, #PH2 West Loop, Chicago

Renting vs. buying in Chicago

If you’re still unsure whether renting or buying an apartment in Chicago is best, then let’s compare the pros of both.

Pros of renting

  • Great for those who are not ready to settle down in one place for long-term
  • Gives greater freedom to move around from neighborhood to neighborhood
  • A better option for those who are on a tighter financial budget
  • Gives you an opportunity to save up money for a future home purchase
  • Depending on the market, it can be cheaper to rent than buy
  • No need to worry about home maintenance expenses

Pros of buying

  • Great for those who want to settle down long-term in a neighborhood
  • Gives more freedom to personalize, customize, and transform your home
  • A fixed mortgage can protect you from inflation that usually leads to higher rent rates
  • A home or property can be a great financial investment
  • Allows you to build equity if the value of your home goes up in the future
  • Your mortgage interest and property taxes may be tax deductible
houses for sale in chicago
1543 North Wood Street, #1 Wicker Park, Chicago

Houses for rent in Chicago

Houses for sale in Chicago

Whether you’re interested in renting or buying in Chicago, Localize has all the listings on the market for you to explore.

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