I rented my first apartment from a distant relative in Blue Island for $75.00 a month. Sounds like a real bargain, right? Well, it was in an old building on Gregory St. and had a big living room, large dining room, smallish eat-in kitchen, 3 bedrooms & 1 bath. Sounds huge. However, only the master bedroom had an electric outlet. This was in the early 70's. Also, it was oil heat which was very expensive in the winter, although it was only a winter bill. And no air conditioning, but I think we had a couple window units.
Instead of a dining table, we had a ping pong table in the dining room. We were young newlyweds and had a lot of parties. I didn't know half the attendees. We had a White Castle steps away. And we had an elderly, hard-of-hearing lady living underneath us. One time I thought she was being sarcastic after a party. She asked, "Were you home this weekend? I didn't hear anything." I think she was serious!
I believe we moved from that place to a new 2 bedroom apartment in Oak Lawn. I want to say the rent was $240.00 a month but when I think about it, it was probably $140.00 - still a jump from $75.00, but new and very nice.
Rents are going up everywhere
An Inman news article states that rents have increased by a little over 5% nationwide. Like with everything real estate, the highest increases are on the east and west coasts, and the Midwest trails that figure.
Here's an excerpt from the article:
"The highest rates of growth in rent were in:
- Portland – 14.6 percent
- Denver – 13 percent
- San Francisco – 12.7 percent"
The only mention of Chicago was the following:
"Job growth was reported at its lowest in Richmond, Philadelphia, Chicago, Baltimore and Twin Cities."
You're not going to find anything at $75.00/mo. these days (if you did, you probably wouldn't want to live there). Our MLS (Multiple Listing Service) does not have all available rentals. Many landlords handle rental properties themselves by using signs and/or local newspaper advertising. With our current rental inventory in Blue Island the lowest you can find is a 2 bedroom, 1 bath apartment for $840.00.
Here's listings for Orland Park rentals. The least expensive unit available as of this writing is a 2 bedroom, 1 bath apartment for $1,050. Prices go as high as $3,100 for a 4 bedroom, 4 bath, 3,437 sq. ft. single family home.
Is it better to rent or should you consider buying?
Interest rates are still low. The only reason you would want to rent instead of buying is if you can't get a mortgage because of financial issues - low FICO score, too high of a debt-to-income ratio or lack of necessary cash on hand for a down payment and closing costs (although we can always ask a seller to contribute towards closing costs).
There are other reasons to rent vs. buying. If you're going to move out of the area within the next few years it might be best to rent. My parents, who owned their own home for most of their adult lives, sold their prior Illinois home and rented one for a year while they decided where they wanted to retire to. They bought a house in Mesa, AZ and didn't have to worry about being Contingent on Sale or Close because they had already sold their house. They were able to take their time and not rush into anything.
There are some people who would rather not be held down by one property with a mortgage. They're not sure where life will take them and they aren't ready to make such a commitment either financially or geographically. Some people want to live in an area of a large city where they can't think of purchasing a place in because the prices are too steep, so they rent in the area so they can have the big city lifestyle they want.
And then there are those that don't want to be stuck with home maintenance. They would rather pay a landlord than to have the responsibility of fixing and maintaining a property. Of course, there are always condos and townhomes, but each association has different rules on what the association maintains and what the owner is responsible for. Usually all interior items are the owners responsibility.
Perks of owning vs. renting
You can check out a rent vs. own calculator here. You can also use our mortgage calculator. The reason home ownership is an ideal situation is that you own the property. You can paint the walls however you want. You receive an amount of privacy you can't guarantee with a rental (no landlords requesting a visit). You can claim tax deductions for your mortgage interest and real estate taxes. In a decent market, you can build equity to help you with your next purchase and build your net worth.
I more than doubled the value of the the first home I bought in Evergreen Park after 3 years. I then lost a little on a home in Oak Lawn as we were in a recession at the time that we sold. We lost on our last sale because we paid more for it in 2003 than it was worth in 2010 after the real estate bubble burst. However, we got a great deal on our current home, so we figured it balanced itself out and we have already increased our equity in this one by a nice amount.
If you think you might be able to qualify for a mortgage with today's low rates (they recently went below 4% again), I have some great loan officers/mortgage brokers that I work with. It only takes a phone call to see if you can qualify. Call me at 708-536-8200.