Moving to Chicago? When it comes to finding a home in the Windy City, 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?
- What part of Chicago do you want to live in?
- 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.
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
While a rented space comes with rules, buying a property in Chicago gives you the freedom to make the space your own. If you’re tired of living in a place 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 Long Term
If you find a home in Chicago for $225,000 and plan to stay in that home for more than five years, it may be more cost-effective to purchase than to rent the home in the long run—partially due to having a fixed mortgage rate. Even then, many homeowners are eligible for tax breaks and government assistance on a downpayment or closing costs, which can help you save money right away. The Downpayment Plus (DPP) and Downpayment Plus Advantage programs offer Federal Home Loan Bank of Chicago members down payment and closing cost assistance for eligible homebuyers.
See Better Returns on Investment
Over the last five years, Chicago home values have increased by over 34%—with a 9.1% increase in just the past year, resulting in a hot Chicago real estate market. “Luxury and turnkey houses are selling very quickly,” said Chicago real estate agent and property broker Joanne Nemerovski. Nemerovski also says the number of desirable neighborhoods in Chicago continues to grow and will keep doing so as more people flip properties. Homeowners who opt to flip their homes in Chicago can see a gross ROI of nearly 50%.
Home prices in Chicago are expected to rise in the future, due to inventory shortages and the high cost of new construction.
If you have a good credit score, buying property in Chicago and consistently paying your mortgage can help you continue building credit. Growing your owned assets and investing in real estate is a great idea if you can afford the costs of home ownership and have the funds for a downpayment. While home appreciation isn’t 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, and buying a more permanent home could facilitate deeper connections with your neighbors and 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
Property ownership in Chicago may look different depending on the neighborhood, with a variety of attached and detached housing options. Below are some Chicago neighborhoods perfect for buying a home!
- Home Price: $272,248 median purchase price
- Crime Rate: Safer than 60% of Chicago neighborhoods
Hyde Park sits right by Lake Michigan and is near historic sites like the University of Chicago, DuSable Museum of African American History, and the Museum of Science + Industry Chicago. Residents of this Chicago neighborhood can find a diverse mix of shops, bookstores, coffee shops, and world-class dining. Hyde Park is also one of the more racially and generationally diverse neighborhoods in Chicago. Throughout Hyde Park, you’ll find stunning vintage buildings and treasured architectural gems, like Frank Lloyd Wright’s Robie House. Hyde Park’s abundant green spaces, top-rated schools, and spectacular museums make it an attractive neighborhood for families.
- Home Price: $508,008 median purchase price
- Crime Rate: Safer than 69% of Chicago neighborhoods
Looking to get into Chicago’s luxury real estate? Nemerovski says historically-desirable neighborhoods like Lincoln Park continue to see appreciation today. Homes in Lincoln Park range from historical brownstones to modern condos, with a variety of high-rise apartments and lofts for purchase, as well. A prime waterfront location with an expansive park, historical and expansive Lincoln Park Zoo, and easy 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: $545,871 median purchase price
- Crime Rate: Safer than 94% of Chicago neighborhoods
Anyone wanting to buy property in one of 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, Chi-Town neighborhood feel, cozy coffee shops, casual venues, authentic international eateries, and low crime rate all contribute to North Center becoming increasingly popular among homebuyers with children. It’s worth noting that North Center has a growing housing market, so condo prices and median housing costs are projected to climb.
- Home Price: $248,351 median purchase price
- Crime Rate: Safer than 21% of Chicago neighborhoods
If you’re hoping to buy a home near Downtown Chicago, you can’t beat West Loop! Known as a foodie haven, there’s no shortage of great places to eat in this downtown Chicago neighborhood. This area also features spots like Greektown and the Fulton River District, offering mixed-use commercial and residential buildings where new high-rise condos, business offices, retail shops, and restaurants are located. West Loop is a favorite among young professionals, but families hoping to raise kids in an urban setting close to the city’s arts and culture center will love this area as well. West Loop has also become a more balanced market, so if you’re looking for a luxury Chicago condo with unbeatable amenities, this Windy City neighborhood is the place to be!
Should You Rent a Home in Chicago?
Maybe renting in Chicago is the best option for your financial and lifestyle needs. 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 (or “sides”), 77 community areas, and over 200 neighborhoods can take some time. For this reason, Maurice Ortiz at Apartment People—a website that helps people rent and buy in Chicago—says most people will choose to rent when they first arrive in the city. Renting allows you to explore the residential areas of Chi-Town without the massive commitment that comes with buying property. By taking the time to explore different neighborhoods and find areas you really enjoy, you can make a more informed decision when you go to buy a home.
Have More Flexibility
When you live in a big city like Chicago, renting potentially allows you to experience living in different parts of the city. Public transportation makes accessibility around the city super convenient, so you can live and visit anywhere in the Windy City with ease. Homeownership, on the other hand, ties you down to one specific area. If you’re a recent college graduate or young professional, someone who moves frequently for work, or if you’re anticipating big life changes in the near future, renting might be easier for your lifestyle.
Additionally, while you may think Chicago is your forever home, the Windy City hasn’t escaped the population decline some have coined the “Illinois Exodus.” Chicago, due to its rising cost of living, has seen a decline in residents for the past two years. If you find yourself uncertain about future plans, renting gives you the freedom to relocate once your lease is up.
Save Money Today
Curious if it’s more cost-effective to rent or buy in Downtown Chicago? In trendy downtown areas, your monthly rent will likely be more affordable 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 29% higher than the state of Illinois—but property taxes, individual homeowners insurance, and any potential HOA fees can add up quickly. Renting in Chicago will allow you to keep your money more easily accessible.
Avoid Rising Property Taxes
People often forget about property taxes among the other 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. So while you might escape rising rent when you buy, the predicted property tax increases 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 comes 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!
Experience Unique Amenities
In many cases, renting an apartment allows you to take advantage of amenities you might not 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.
Reduce Market Risk
If you’re 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 may not be always guaranteed. Some Chicago residents may want a little more time to consider options before buying, due to Chicago’s vulnerable housing market.
Best Places to Rent a Home in Chicago
Renters in Chicago can find a variety of rental options to choose from, like charming bungalows, greystones, and high-rise apartments. Below are the Chicago neighborhoods you should check out if you’re interested in renting a home!
- Home Price: $990 median monthly rent
- Crime Rate: Safer than 77% of Chicago neighborhoods
With close proximity to Loyola University Chicago, cool antique shopping, and Foster Beach, Lane Beach, and Osterman Beach, Edgewater is one of the best places 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, along with the neighborhood’s abundance of public transportation options near the Thorndale stop on the CTA’s Red Line. This Chicago neighborhood’s green spaces, stunning views of Lake Michigan, and convenient beach access help make it an ideal place for renting an apartment.
- Home Price: $1,552 median monthly rent
- Crime Rate: Safer than 34% of Chicago neighborhoods
Just as its name implies, Gold Coast is a Chicago hot spot for luxury rentals. Once industrial warehouse districts, the Gold Coast area and its neighbor, River North, 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 Oak Street Beach, 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 75% of Chicago neighborhoods
Not only is it home to Wrigley Field and Chicago’s best LGBTQ scene—previously known as Boystown and recently renamed to Northalsted—but Lake View also offers tons of housing options for renters! “Lake View 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.” Top entertainment spots like the Belmont Theater District make this Chicago neighborhood a favorite among renters. No matter what type of rental property you’re looking for, you can find it at a lower price point than you would in nearby Lincoln Park!
- Home Price: $1,507 median monthly rent
- Crime Rate: Safer than 43% of Chicago neighborhoods
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. In South Loop, you’ll find vibrant jazz clubs, trendy restaurants, and historic areas like the industrial Motor Row and charming Prairie Avenue District. “The Loop is one of the hottest neighborhoods in the city,” Keane said, adding that the NEMA Chicago high-rise, which was completed a few years ago, 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 cheap storage units in Chicago!
Neighborhood statistics from AreaVibes