Thinking about buying an investment property in the Chicago area? It is a smart idea that can generate a good amount of wealth for you and your family. Before you invest, we invite you to take a look at these 6 things you need to know about a property before investing in Chicago!
When making an investment in Chicago real estate, you’ll want to be as informed as possible. There is a lot of information you will want to collect for the property you are thinking about buying. Real estate investment is a huge decision and isn’t something you should go into lightly. Gaining as much knowledge as possible about a home will only benefit you in the long run. Below are just a few of the questions you should be asking before making a real estate investment in Chicago!
In any real estate transaction, one of the most important things to do is to make sure the property has a clean title. Having a cloudy title means that someone else may be able to make a claim to the property, thus making your purchase invalid. Sales history of a property is typically public information. Using your county appraisers website, you can see who owned the home, what they paid and when. While you should ALWAYS use a title company to check everything out, you can do some research by checking the property’s sales history on your own. Knowing the sales history can also give you an upper hand in negotiations. You’ll be able to see who paid what for the property and when.
Repairs and Renovations
Before buying an investment property in Chicago, you should learn as much as possible about the property’s history. Have there been add-ons/ Was the work done properly with all permits pulled? Who did the work? Knowing these things will help you better understand the inner-workings of the house as well as who to call if something should go wrong. You’ll also want to bring a trusted contractor in to help estimate the cost of any needed repairs. It is one thing to know a few upgrades are needed, but knowing the actual numbers can be a game changer.
As an investor of Chicago real estate, it’s important to know about any development potentially happening in the area. New construction can have an impact on the value of the property and the amount you are able to charge for rent or if you decide to resell the house. If there isn’t much of anything in the works, you can expect prices to remain level, possibly dropping if the area isn’t being properly maintained. However, if there are new schools, stores, or roads being built, you can almost always count on future growth happening within the area, adding value to your property.
If someone is buying a property, they need to know what they are able to do with it. They may not be able to add that second story or the carport out front. Some properties may be zoned residential, but surrounded by commercial properties, forcing the owner to have the zoning changed if they are wanting to open a business of their own. In other cases, endangered or protected animals can limit building plans for property owners in Chicago. You’ll want to check on the zoning of the property in question as well as what is nearby, before making an offer on a property.
If you are purchasing a property for investment in Chicago, it’s important that you know what to expect. How much is the property bringing in each month? What does turnover look like? And how are the other rental properties performing in the area? Don’t take the property owners word for it, require documentation backing up their income claims. You don’t want to find yourself stuck with an unrentable property in Chicago.
A great location is one of the most important things when it comes to buying an investment property. Do people want to live there? What’s the neighborhood like? Before buying an investment property in Chicago, take it upon yourself to become the local neighborhood expert. Become familiar with the local businesses and attractions in the area. Is it an up and coming area? If so, it can be the perfect place to buy your Chicago investment property.
Buying real estate in the Chicago area can be a very smart move financially. However, not all properties are the same. It’s important to look at the physical history of the property as well as the financial. The ownership history and knowledge of the neighborhood are critical as well. Learning as much as you can about a property before making an offer will give you the upper hand in the long run.