When Should I start Looking for a New Apartment to Rent? In Chicago

One of the questions I ALWAYS get asked, whether by friends or by clients, is “When should I seriously start looking for a new place to rent?” How many days before I need to move should I start shopping?

In Chicago the best time to start looking for a place to rent is roughly 60days out. Privately owned condos come on the market for rent at various times. If you’re looking for August 1st for instance you may see a privately owned condo his the market anywhere from June 1st or sooner or you may see them come on the market at the end of July. A great rule of thumb though is to start looking 60days out. Make sure when you are looking that you are only looking at units that fit your move in date. The rental market is extremely hot right now so owners have absolutely zero incentive to keep a place vacant for a tenant. For instance if a place is available for August 1st, owners will not hold it for September 1st.

With all this being said though it is never too early to start looking online! You can always look online and even have a Realtor send you listings in order to start to get an idea of what your money can buy you. This is extremely important in the current rental market as places rent fast (typically in a few days). Looking online for a while before actually shopping for a place will allow you to understand what a great deal is as soon as you see it and then you can jump on it!

HOW MUCH HAVE RENTS INCREASED IN CHICAGO?

How much have rents truly increased in Chicago? Now, with a typical rental season now behind us we can look at all the data and that is just what I have compiled for you. The main rental season is considered from April 1st through October 1st. However, I expanded a month on both sides and researched my data from March 1st to October 31st in 2010 and 2011. I only used RENTED Comparables from the MLS during this period. I’ve broken down the research into the following areas. The numbers next to the areas represent the “Area Number” in the MLS System.

Loop (8032)

River North, Gold Coast, Streeterville, Old Town (8008)

Lincoln Park (8007)

Lakeview (8006)

When I started putting the data together I further broke down the data by number of bedrooms. We obviously want to compare apples with apples here so we don’t have the numbers skewed. If for instance more 2 bedrooms rented in 2011 than in 2010 this may make our average rent price greater if we did not remove 1 bedrooms from the equation. So here are the numbers

CHICAGO LOOP (8032)

Studios

Average Price in 2010 $1,168

Average Price in 2011 $1,206          3.25% Increase 

One Bedrooms

Average Price in 2010 $1,512

Average Price in 2011 $1,620     7.1% Increase 

Two Bedrooms

Average Price in 2010 $2,215

Average Price in 2011 $2,338     5.55% Increase

Three Bedrooms

Average Price in 2010 $3,739

Average Price in 2011 $3,595       5.9% Decline

Why the decline in 2011? Hard to say. The rest of the market is up, however the sampling we had was small. Only 64 units rented in 2011 and 61 rented in 2010. For purposes of the MLS the “Loop” is bordered by the River to the North, Lake on the East, Roosevelt to the South and Halsted on the West.

CHICAGO NEAR NORTH SIDE: RIVER NORTH, GOLD COAST, STREETERVILLE & OLD TOWN (8008)

Studios

Average Price in 2010 $1,113

Average Price in 2011 $1,221     9.7% Increase

One Bedrooms

Average Price in 2010 $1,585

Average Price in 2011 $1,729     9.05% Increase 

Two Bedrooms

Average Price in 2010 $2,539

Average Price in 2011 $2,781   9.56% Increase

Three Bedrooms

Average Price in 2010 $4,400

Average Price in 2011 $4,830   9.78% Increase

The Near North area comprises several neighborhoods including River North, Gold Coast, Streeterville and Old Town. The borders are the Lake to the East, River to the South, North Avenue to the North and Halsted to the West. This area was relatively consistent in their year over year price increases no matter what size unit, whether it was a studio or a 3 bedroom.

CHICAGO LINCOLN PARK (8007)

Studios

Average Price in 2010 $887

Average Price in 2011 $990       11.56% Increase

One Bedrooms

Average Price in 2010 $1,302

Average Price in 2011 $1,427       9.6% Increase

Two Bedrooms

Average Price in 2010 $1,967

Average Price in 2011 $2,073    5.4% Increase

Three Bedrooms

Average Price in 2010 $2,852

Average Price in 2011 $3,003    5.31% Increase

CHICAGO LAKEVIEW (8006)

Studios

Average Price in 2010 $851

Average Price in 2011 $876    2.9% Increase

One Bedrooms

Average Price in 2010 $1,209

Average Price in 2011 $1,300   7.52% Increase

Two Bedrooms

Average Price in 2010 $1,699

Average Price in 2011 $1,889   11.19% Increase

Three Bedrooms

Average Price in 2010 $2,297

Average Price in 2011 $2,440   6.22% Increase

 

PAUL BLACKBURN – REALTOR

@ PROPERTIES

PAUL@PKBLACKBURN

www.TheChicagoRealtyBlog.com

 


SHOULD I RENT IN A CONDO BUILDING OR RENTAL BUILDING?

While this may not be a million dollar question deciding whether or not to rent in a condo building versus in a rental building is a question that many renters have on their mind. What are the differences? What are the benefits and the risks of each? Well, lets dive right in and discuss.

First, let me explain that the Chicago market has seen a massive resurgence in the rental market. With less people being able to qualify for mortgages and many “would-be” buyers still hesitant about the real estate market, there are more renters in the market than we have had in a long time. When we factor in the depressed sales prices of condos in the city, many condo owners have decided to rent out their units instead of sell them. This leaves renters with two choices: Rent from a private owner in a condo building or Rent from a professional management company that owns an “apartment building” or “apartment tower/high rise.”

Common Questions Asked about Privately Owned Condos:

WHAT IF SOMETHING BREAKS? LETS SAY MY DISHWASHER STOPS WORKING. WHO DO I CONTACT THE BUILDING OR THE OWNER?

The answer varies depending on your landlord. In many cases the landlord will want you to contact him/her first, however, they will typically utilize a management service or even the building engineer to take care of the problem. With the large amount of condo owners now renting out their units, many small management companies have started. These companies specialize in managing single units such as a condo or a house.

WHO DO I PAY RENT TO?

You will pay rent directly to the landlord. Sometimes the landlord will have an LLC or Corporation set up that you will pay rent to or you may pay rent to the management company that HE/SHE has hired to manage the property you are renting.

WHAT IF THE LANDLORD SELLS THE UNIT WHILE I’M LIVING THERE?

For starters all leases survive the sale of a unit unless stated otherwise. In other words, this means that if your unit is sold, the new owner must abide by the lease and honor it. However, in cases where a unit is up for sale and up for rent, I ALWAYS REQUEST that the unit be taken off the market for sale once a lease is signed. Typical leases only allow a landlord to show the property for rent or for sale during the last 60 or 45 days of the lease and NOT AT ANY OTHER TIME DURING THE LEASE TERM. There are exceptions, however, these must be clearly spelled out to you in the lease and are only in rare cases and also means you would need to agree to it!

WHAT IF THE LANDLORD STOPS PAYING HIS MORTGAGE EVEN THOUGH I’M PAYING RENT?

You may have read stories of this happening. First you need to know this is very rare and doesn’t happen often. Most condo unit owners are renting their units out because it is an investment for them. Furthermore, most condo owners in the city are well to do and do not want to risk a foreclosure on their record. In the unlikely event that this does happen, rest assured it takes a very long time for a bank to foreclosure, typically 12 to 18months under PERFECT conditions. Plus, the bank must give you notice before taking over the unit. It is not as if they can show up one day and say “guess what, you’re gone!” While this is a perfectly good question to ask it is something that you shouldn’t worry about.

WHAT ARE THE BENEFITS OF RENTING IN A CONDO BUILDING?

It has been my experience, when compared with apartment buildings of the same price range, condo buildings offer a better value in total. Typically the units are more updated and upgraded. Things such as Hardwood Floors, Granite, SS Appliances, Marble Bathrooms are much more common place in condo buildings than in all rental buildings.

Since the majority of people in the building are owners it is my experience that the building is kept up better. There are less people moving in and out, therefore there is less wear and tear on the building as well.

Even though you are renting in the building, you are treated as an owner whether it is the maintenance staff or the doormen, I’ve found there is a great sense of a “home” feeling.

Common Questions Asked About Apartment Buildings

APARTMENT BUILDINGS ALWAYS SEEM TO BE RAISING THEIR RENT PRICES. WILL MY RENT PRICE INCREASE WHEN IT IS TIME TO RENEW?

Many apartment buildings use lease incentives to get you into their units. There are many reasons for this, however, the largest reason is that they want the high lease rate on their books. For instance if they lease a place to you for $2,000/mo but give you 1 month free they still have $2,000/mo on their books. However, as far as you are concerned your effective rent is only $1,833/mo since you are only paying for 11 months but living there 12.

The question here is “Will your rent be $2,000/mo when it is time to renew?” The answer is: More than likely YES if the rental market is good. If the building is hurting for people, however, you can typically negotiate a very good incentive for not leaving. Unfortunately, right now in 2011, chances are your building has people banging down the doors to get in so there is no need for them to offer you an incentive to stay.

MY FRIENDS LIVE IN APARTMENT BUILDINGS. THEY LOVE THEIR HEALTH CLUBS AND ALL THE SERVICES. DO ALL RENTAL BUILDINGS HAVE THIS?

No, not all rental buildings have great health clubs, but many do. One of the big advantages to an “all rental building” is that the amenities are typically well designed and LARGE. They typically have good size fitness centers, newer facilities and are kept up quite well. The biggest reason for this is because it is one of the ways rental buildings draw in new renters.

ARE ALL MY UTILITIES INCLUDED IN MY RENT?

Unfortunately, unlike in many condo buildings where the assessment paid by the owner can include many of your utilities, most rental buildings charge you an “Activity Fee” or a “Utility Fee” on top of the rent you pay. This fee is typically based on the size of the unit you are renting and can range anywhere from $75 to $250/mo.

 

What are the biggest benefits of each?

BIGGEST BENEFITS OF RENTING A CONDO VERSUS AN APARTMENT:

Better Quality Units – Your dollar gets you more – More locations to choose from – Well kept hallways – You are treated as an owner

BIGGEST BENEFITS OF RENTING AN APARTMENT VERSUS A CONDO:

Larger Amenity Floors – Your unit will always be available for you to rent if you’re willing to pay the price