Buying a 1 bed condo in the heart of River North area. Good idea? (Sterling: foreclosures, rentals)

[ChiCityChiCity]

I'm looking to move downtown from my live in investment property. I'd rather buy than rent and pay for someone else mortgage. I was considering the Fulton River District but I can get one in River North for a bit more.

The price of condo is back to just about below 5% of the peak price in 2008 before the crash. Is now still a good time to buy? From my calculation, I can at least rent the condo out and break even with my mortgage + tax + HOA monthly payment. It is super easy to rent in that area.

I'm looking at the high rises in Kinzie & Lasalle. What do you guys think?

[emathias]

Originally Posted by ChiCityChiCity

I'm looking to move downtown from my live in investment property. I'd rather buy than rent and pay for someone else mortgage. I was considering the Fulton River District but I can get one in River North for a bit more.

The price of condo is back to just about below 5% of the peak price in 2008 before the crash. Is now still a good time to buy? From my calculation, I can at least rent the condo out and break even with my mortgage + tax + HOA monthly payment. It is super easy to rent in that area.

I'm looking at the high rises in Kinzie & Lasalle. What do you guys think?

Be careful if you're looking at The Sterling. It had a rash of foreclosures during the crash and I'm not sure what percentage of the units are owned vs. rented anymore. That can affect salability. Also take a good look at their reserves.

[chet everett]

Originally Posted by emathias

Be careful if you're looking at The Sterling. It had a rash of foreclosures during the crash and I'm not sure what percentage of the units are owned vs. rented anymore. That can affect salability. Also take a good look at their reserves.

There are lots of reasons to be wary of "buying at near peak prices" and top of that list is that MANY condo units are in buildings where the "reserve funds" are just a sea of red ink from unpaid assessments and lost legal fees.

The short answer is that for anyone that fears having to pony up huge jumps in assessments ought to give some serious attention to the overall finances of the condo HOA and also get as much as info as possible about the status of owner-occupied units vs those rented out...

While there are some circumstances where one can do well buying a condo, the degree to which previous "distressed sales" leaves the whole complex with an undesirable mix of "quick buck" type landlords is a huge negative.

[ChiCityChiCity]

Originally Posted by emathias

Be careful if you're looking at The Sterling. It had a rash of foreclosures during the crash and I'm not sure what percentage of the units are owned vs. rented anymore. That can affect salability. Also take a good look at their reserves.

Yes, I'm looking at the Sterling and 400 N Lasalle. What I like about them is that they don't have Rent Cap so I can rent the condo anytime if I move away. I plan to keep the property for at least 5 years.

[ChiCityChiCity]

Originally Posted by chet everett

There are lots of reasons to be wary of "buying at near peak prices" and top of that list is that MANY condo units are in buildings where the "reserve funds" are just a sea of red ink from unpaid assessments and lost legal fees.

The short answer is that for anyone that fears having to pony up huge jumps in assessments ought to give some serious attention to the overall finances of the condo HOA and also get as much as info as possible about the status of owner-occupied units vs those rented out...

While there are some circumstances where one can do well buying a condo, the degree to which previous "distressed sales" leaves the whole complex with an undesirable mix of "quick buck" type landlords is a huge negative.

Exactly my thought, I don't know if buying at near the top is a good idea. Ideally, I'd prefer to buy another investment property to get some rental income and then rent a condo downtown. Unfortunately, there are not that many great investment property left in the market. Even the decent ones are gone in less than 5 days.

On the other hand, buying a condo that is easy to rent and can cover my mortgage at least gives me peace of mind.

[Carson9]

Originally Posted by ChiCityChiCity

Yes, I'm looking at the Sterling and 400 N Lasalle. What I like about them is that they don't have Rent Cap so I can rent the condo anytime if I move away. I plan to keep the property for at least 5 years.

I personally would be weary of buildings with NO rental caps. If the rentals get into too high of a percentage, that means other future buyers will not be able to get financing (unless they're paying in cash). That greatly decreases the number of people you could sell to, thus bringing down the price.

Rental caps are a good thing. As long as they're not too strict and give you the option to rent if needed.

[long101]

Personally, I would much rather own a place where the majority of the tenants are owners. I would imagine a lot of people would share my sentiment, so that could affect selling.

In terms of peak prices... Owning is a lifestyle choice 1st, financials should be 2nd. If the pros and cons of owning appeal to you, go ahead.

[Kch84]

I live in the sterling, and I like it, for a future rental it's a good building in my opinion. I have not heard of any foreclosures, though there might be. They just did a massive renovation, the building has a lot of young professionals living that work in the loop surrounding areas. In about 2 years I will be ready to buy an investment property and if I found a good deal in the Sterling I would defiantly consider it.

[ChiCityChiCity]

Originally Posted by Kch84

I live in the sterling, and I like it, for a future rental it's a good building in my opinion. I have not heard of any foreclosures, though there might be. They just did a massive renovation, the building has a lot of young professionals living that work in the loop surrounding areas. In about 2 years I will be ready to buy an investment property and if I found a good deal in the Sterling I would defiantly consider it.

Do you mind telling how much you pay for rent and how many beds/baths in your condo?

[Kch84]

I'm under 1350 for a studio on the 24th floor, which is cheap and I've been here for a while too. The higher the floor the more expensive. A 2 bed just got rented next door for 2700. 1 beds go from 1600- 2k, depending on the floor. Also all units have a washer dryer, granite breakfast bar, etc with a garbage disposal.