Moving to Chicago? When it comes to finding a home in Chicago, there are a lot of factors to consider before you decide whether to rent or buy. Start by asking yourself these questions:
- How familiar are you with the Chicago area?
- How long do you plan to stay in the Windy City?
- Do you have enough money for a downpayment?
- Can you afford to buy in your desired neighborhood?
Now that you’ve thought about these questions, you’re ready to begin your research! Explore the pros and cons of renting vs buying in Chicago below with insights from local real estate experts.
Should You Buy a Home in Chicago?
There are many benefits to buying a home in Chicago! Below are a few reasons why you might consider investing in Chicago’s real estate market by purchasing a home, townhome, condo, or loft.
Customize Your Home
Do you want to paint the walls? Hope to install a one-of-a-kind closet system? What about hanging paintings and other wall decor? If you’re tired of living in a vanilla box where you can’t make any changes, buying a home could help you achieve your dreams of finally feeling settled, according to Emily Sachs Wong, a realtor with @properties. With no landlord to set the rules or hold onto your security deposit, you can curate the home and atmosphere of your dreams.
Save Money Later
Is it cheaper to rent or own a house in Chicago? In many metropolitan areas, the tipping point that makes owning a home cheaper than renting takes just a few years. In Chicago, this will depend on the neighborhood and your budget. You can explore how long it would take factoring in your specific financial situation with Zillow’s rent vs buy calculator.
Even if it will take a few years for your mortgage to be less than your monthly rent, many homeowners are eligible for tax breaks and government assistance on a downpayment or closing costs that will help them save money right away. Plus, owning means you’ll no longer be trapped in a cycle of rising Chicago rent prices that can raise your monthly expenses or result in getting priced out of your neighborhood.
See Better Returns on Investment
While not guaranteed, seeing a return on your investment is a major advantage of buying a home in Chicago. When new development and improvements hit your neighborhood, it won’t mean rent hikes for you. It’ll mean the value of your property will rise, which benefits you in the long run. So if you’re thinking about buying a home or fixing up a home to flip later, you could see good returns.
“Luxury and turnkey houses are selling very quickly, ” said Joanne Nemerovski, a Compass real estate agent. Nemerovski also says the number of desirable neighborhoods in Chicago continues to grow and will keep doing so as more people flip properties. Currently the Chicago real estate market is hot, and home values are predicted to increase by 3% overall.
Take Advantage of Growing Inventory
In the past, the Chicago housing bubble burst kept people from renting. Now, slowing home sales has some sellers worried. But this market correction actually shows hopeful signs for buyers who have been priced out of owning a home. This is thanks to Chicago’s growing housing inventory—due in part to homes taking longer to sell, continued development and new construction, and the stable or declining Chicago population—which is giving many first-time buyers a lot more choices than in past years.
Buying property in Chicago means you’re building credit. Investing in real estate and growing your owned assets is great idea if you can afford the costs of home ownership and have the funds for a downpayment. While appreciation on your home is not guaranteed, paying your mortgage promises to increase your credit health. This financial decision also gives you something to leverage if ever you need a loan.
Many Chicagoans have deep pride and love for their city, so buying a home could facilitate deeper connections with your neighbors and your local community. “When you rent, the entire feeling of where you live is more transient,” Sachs Wong stated. “But when you own a condo or house, typically everyone around you is also an owner, so they’re more committed to the streets and vibe of the area.”
Invest in a City on the Rise
“Chicago is an amazing place to be buying for the long term,” Nemerovski said. “We are a world-class city that’s going places.” And it’s true! Chicago has a thriving arts and music scene, famous pro sports teams, highly-rated colleges and universities, and some of the best dining in the Midwest. Nemerovski says buying in Chicago is also a good investment because of its geographic location in the U.S.
Best Places to Buy a Home in Chicago
Below are the Chicago neighborhoods you should check out if you’re interested in buying a home!
- Lincoln Park
- Logan Square
- North Center
- West Loop
- Home Price: $508,008 median purchase price
- Crime Rate: Safer than 75% of cities in Illinois
Looking to get in the luxury real estate game? Nemerovski says historically desirable neighborhoods like Lincoln Park continue to see appreciation today. With its expansive park, a prime waterfront location, and charming walkability, it’s easy to see why Lincoln Park is one of the best neighborhoods in Chicago for buying a home—and why it comes with a heftier price tag than most!
- Home Price: $338,254 median purchase price
- Crime Rate: Safer than 61% of cities in Illinois
Logan Square is not up-and-coming anymore! This hip neighborhood has arrived and is full of great restaurants and exciting nightlife. “There’s a lot of energy at all times,” Sachs Wong said. While Logan Square remains a hot spot for renters, the neighborhood’s rehabbed Colonials and modern single-family homes are popular housing options for singles and young professionals looking to buy!
- Home Price: $545,871 median purchase price
- Crime Rate: Safer than 94% of cities in Illinois
Anyone wanting to buy property in one the best Chicago neighborhoods for families should check out North Center! “There’s good schools, a lot happening, and great parks right there,” Sachs Wong said. The quaint neighborhood feel, cozy coffee shops, and low crime rate all contribute to North Center becoming increasingly popular among homebuyers with children. North Center has even made the list of Chicago neighborhoods with the highest appreciation over the last three years!
- Home Price: $331,150 median purchase price
- Crime Rate: Safer than 86% of cities in Illinois
If you’re hoping to buy a home near Downtown Chicago, you can’t beat West Loop! Coined the “unofficial foodie capital of Chicago” by some residents, there’s no shortage of great places to eat in this downtown neighborhood. West Loop is a favorite among recent college grads and young professionals, but families hoping to raise kids in an urban setting close to the city’s arts and culture center will also love the area. West Loop has even become of the highest appreciating neighborhoods in Chicago, so if you’re in the market for a luxury condo with unbeatable amenities, West Loop is the place to be right now!
Should You Rent a Home in Chicago?
Maybe renting in Chicago is the best option for your lifestyle needs today. Here are a few reasons why staying in the Chicago rental market could be a smart choice for you!
Get to Know the City
If you’re new to Chicago, getting to know the nine districts, 77 community areas, and over 200 neighborhoods can take some time. For this reason, Maurice Ortiz at Apartment People—a website that helps people both rent and buy in Chicago—says that most people will rent when they first arrive in Chicago. Renting allows you to get to know the city without the massive commitment that comes with buying property. By taking the time to explore different neighborhoods and find areas that you really enjoy, you can make a more informed decision when you go to buy a home.
Save Money Today
Curious if it’s cheaper to rent or buy in Downtown Chicago? In trendy downtown areas, your monthly rent will likely be cheaper than a mortgage payment. While the purchase price and how much you’ve saved for a downpayment will affect the tipping point, renting is more affordable than buying right now in Chicago. This trend is expected to continue as mortgage rates keep rising. “Making a 20% downpayment to get that dream condo isn’t always in the cards,” said Rory Keane, Director of Communications at Domu, a popular Chicago rental site.
Not only is a downpayment a major investment—especially in Chicago where home prices are 51% higher than the state of Illinois—but property taxes, individual homeowners insurance, and any potential HOA fees can add up quickly. If keeping your funds liquid for emergencies, car payments, and other monthly expenses is more important right now, or your credit score isn’t quite where you’d like it to be, consider renting in Chicago to keep more money easily accessible.
Avoid Rising Property Taxes
Property taxes often get forgotten when people take into account the expenses of owning a home, but they’re crucial to factor in. “Chicago is raising property taxes to account for gaps in the city’s budget, and homeowners will be feeling the squeeze over the next five to ten years,” Keane said. While you might escape rising rent when you buy, the predicted property tax increases over the next ten years could put buyers right back in the same cycle of paying more than they bargained for.
Don’t Worry About Maintenance
Repairs, renovations, and maintenance all cost money, as well as time. If you prefer to be hands off when it come to your home, want more time to explore Chicago’s nightlife, or simply don’t want to worry about the costs of unexpected repairs, continuing to rent instead of buying is a smart option!
Move Whenever You Want
How long will you live in Chicago? Are you planning on getting married soon? Want to have kids in the next year or so? What about changing jobs? If you can’t answer these questions, the freedom to easily move to another neighborhood, bigger rental, or even a new city are major reasons to keep renting. And while you might think Chicago is your forever home, the Windy City hasn’t escaped the population decline that have some have coined the “Illinois Exodus.” Chicago specifically, due in part to its rising cost of living, has seen a decline in residents for three consecutive years. If you’re not certain about future plans, being untethered and able to easily relocate when your lease is up is a smart idea.
Experience Unique Amenities
In many cases, renting a home allows you to take advantage of amenities you might not otherwise have if you owned your home. Whether that’s a fitness center, rooftop pool, community garden, convenience store, or a movie theater, you’re more likely to find cool perks with rental apartment and condo buildings. “Rental companies have stepped up their game in recent years to woo tenants, and many of the new properties hitting the Chicago market include very luxe amenities, offering everything from social spaces to dog spas,” Keane said.
Not comfortable assuming the risk of potential depreciation? Renting is your best bet for now! While the hope is that you’ll see a return on your investment when you buy a home, appreciation is not always guaranteed. And with the forecasts on Chicago’s weakening housing market and the transitional state of many neighborhoods, some Chicago residents want a little more time to consider options before buying.
Best Places to Rent a Home in Chicago
Below are the Chicago neighborhoods you should check out if you’re interested in renting a home!
- Gold Coast
- South Loop
- Home Price: $990 median monthly rent
- Crime Rate: Safer than 73% of cities in Illinois
With close proximity to Loyola University Chicago, cool antique shopping, and Foster Beach within walking distance, Edgewater is a great place in Chicago for renting a home. “Edgewater has a diverse community, and this north side enclave has largely remained an affordable neighborhood for renters,” Keane said. Edgewater’s beachside location and budget-friendly housing are also big draws for renters, as is the neighborhood’s abundance of public transportation options.
- Home Price: $1,552 median monthly rent
- Crime Rate: Safer than 18% of cities in Illinois
Just as its name implies, Gold Coast is a Chicago hot spot for luxury rentals. Once industrial warehouse districts, the Gold Coast and River North neighborhoods have transformed a lot over the years. “These glimmering neighborhoods are now home to fresh new skyscrapers, posh townhomes, and popular restaurants,” Keane stated. In addition to finding upscale high-rises here, residents are also near the The Museum of Contemporary Art, high-end shopping in the Oak Street District, and lots of trendy bars!
- Home Price: $1,364 median monthly rent
- Crime Rate: Safer than 74% of cities in Illinois
Not only is it home to Wrigley Field and Chicago’s best LGBTQ scene, but Lake View also offers tons of housing options for renters! “Lakeview remains a standout on our list of top rental spots because it offers renters a huge variety of apartments,” Keane said. “From studios on up to 4-bedrooms, renters can find accommodations in high-rise buildings and small houses.” No matter what type of rental property you’re looking for, you’ll find it at a lower price point than you would in nearby Lincoln Park!
- Home Price: $1,699 median monthly rent
- Crime Rate: Safer than 86% of cities in Illinois
Close to Museum Campus, Columbia College Chicago, and Soldier Field, it’s easy to see why the South Loop is one of the best neighborhoods in Chicago for singles and young professionals looking to rent a home. “Right now, the South Loop is one of the hottest neighborhoods in the city,” Keane said, adding that the recently completed NEMA Chicago high-rise added 800 apartments to the market. “Other huge developments in the area bring the overall tally of new apartments close to 2,000 units.”
Whether you plan to rent or buy in Chicago, Extra Space Storage has convenient storage facilities throughout the Windy City that can help with your transition. Find a storage unit near you!