There is no denying the fact that real estate has for long been the go to investment option for people looking for ways to secure their liquid assets from global economic uncertainties. Furthermore, financial institutions are often quick to give mortgages to aspiring homeowners, creating a real estate boom in the process. This article focuses on what the condominium market has in store for would be investors. Read on to learn the options available in the Chicago condo rentals market.
Buying a condo and opting to rent it out is an almost certain way to earn a steady supply of income. However, a number of variables will determine when you get to break even or if the investment is a white elephant. To establish the economic feasibility of your investment prospect, there are numerous calculations that you ought to make.
For starters, you must consider the annual rent that your unit will bring versus taxes, insurance and maintenance costs. Many of these costs are what you should deduct from your annual revenue so as to gauge your real revenue. Other costs that you might want to factor in include the cost of advertising and legal aid for evictions. Remember tenants have their own rights.
If you are buying your property straight up in cash, the only thing you will have to worry about are the aforementioned costs. However, it is an all different ball game for those financing their ownership through mortgages. For instance, there is interest to think about. The margins that most banks give are pretty much the same across the board.
A mortgage is poised to be a headache to work with as you will have to use your rental income to service it over a length of time. If the projected cash flow from your condo appears too little, you might want to hold off on purchasing it. Remember interest always rises with an increase in repayment time.
It is only advisable to apply for a mortgage if one has the means to finance between a quarter and a half of the total amount upfront. This helps lower the repayment window and amount. The general consensus in loan financed investing is that if the expected cash flow is not negative, the investment is viable.
Before you pay for your condo, find out if your ownership will come with occasional monetary obligations. For instance, some require one to regularly part with assessment and association charges. Assessment fees are often geared towards financing certain services in common sections of the property. Such services include renovations on the exterior, parking lot, hallways, lobby, garage and landscaping.
The final major thing to look at is location. You want to purchase your property in an area that has good demand for rental space. Fortunately, most of the places in Chicago are good options. The area has a wide range of clientele, with many of them being college students and working class people. As long as you do your research patiently prior to purchasing, you should have nothing to worry about.
Buying a condo and opting to rent it out is an almost certain way to earn a steady supply of income. However, a number of variables will determine when you get to break even or if the investment is a white elephant. To establish the economic feasibility of your investment prospect, there are numerous calculations that you ought to make.
For starters, you must consider the annual rent that your unit will bring versus taxes, insurance and maintenance costs. Many of these costs are what you should deduct from your annual revenue so as to gauge your real revenue. Other costs that you might want to factor in include the cost of advertising and legal aid for evictions. Remember tenants have their own rights.
If you are buying your property straight up in cash, the only thing you will have to worry about are the aforementioned costs. However, it is an all different ball game for those financing their ownership through mortgages. For instance, there is interest to think about. The margins that most banks give are pretty much the same across the board.
A mortgage is poised to be a headache to work with as you will have to use your rental income to service it over a length of time. If the projected cash flow from your condo appears too little, you might want to hold off on purchasing it. Remember interest always rises with an increase in repayment time.
It is only advisable to apply for a mortgage if one has the means to finance between a quarter and a half of the total amount upfront. This helps lower the repayment window and amount. The general consensus in loan financed investing is that if the expected cash flow is not negative, the investment is viable.
Before you pay for your condo, find out if your ownership will come with occasional monetary obligations. For instance, some require one to regularly part with assessment and association charges. Assessment fees are often geared towards financing certain services in common sections of the property. Such services include renovations on the exterior, parking lot, hallways, lobby, garage and landscaping.
The final major thing to look at is location. You want to purchase your property in an area that has good demand for rental space. Fortunately, most of the places in Chicago are good options. The area has a wide range of clientele, with many of them being college students and working class people. As long as you do your research patiently prior to purchasing, you should have nothing to worry about.
About the Author:
Get a summary of important factors to consider before choosing a holiday accommodation option and more information about affordable Chicago condo rentals at http://www.residenceontheavenue.com now.