Aug
13

Chicago Makes the Grade for Rental Investors

August 13, 2011

While school-supply shopping for their college-bound kids, some parents are considering a bigger purchase than protractors and pens: A Chicago real estate rental property as an investment.

In the next two years, real estate investors are expected to outnumber traditional home buyers by three to one, and more than 56 percent plan to invest in rental properties, according to Move, Inc.

apartment building near the university of chicago

Buying rental property near the University of Chicago is a good investment.

The online realty company released a list of the top 10 college towns that offer leading universities and good rental investment possibilities. Chicago is No. 3 on that list.

In June 2011, Chicago had:

*A median list price of $199,900, down by 16.36 percent since last June.

*Average rental rates of $1,780 for a two-bedroom and $2,074 for a three- or more-bedroom unit.

*A median list price of $199,900.

So, a mortgage payment on a home at the Chicago median list price of would be around $820 with a 20 percent down payment at current mortgage rates for a 30-year fixed loan.

Not a bad investment.

“Local markets with universities or colleges can be an attractive option for many local real estate investors,” said Move, Inc., Chief Executive Officer, Steve Berkowitz.

“Housing demand in college towns is generally high and vacancy rates are usually low. Combine the supply and demand ratio with rising admissions and the five percent rise in rental rates expected by the end of the year, and rental property in college towns can be a smart option for the right investor.”

About 50 percent of today’s real estate investors plan to hold onto their properties for five or more years. Considering undergraduate programs typically last four to five years, college students can be considered long-term tenants for investors.

For more information on Chicago and the other top college towns that “make the grade” for investment appeal, visit move.com.

Here are those top college towns (click it to enlarge it):

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Tracey

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