If you’ve been renting for awhile, you probably are daydreaming about having a home where you can change the paint colors on a whim, hang your wall art with nails instead of removable hooks, and not worry about unpredictable rent increases. However, home ownership is a big financial commitment and there are many questions and costs to consider before making that investment.

The biggest cost that potential first time home buyers think about is usually the down payment. It can be overwhelming to think about saving that lump sum while also paying rent. In 2017, according to statistics compiled by InfoSparks from Midwest Real Estate Date, the median sale price for a 2 bedroom in zip code 60657 (which covers most of Lakeview) was $379,000. Luckily, there are financing options that don’t require 20% down, which means that a first time buyer can get into a home faster and start building equity rather than paying rent. You may be able to purchase a home with as little as 3.5% down and if you are a veteran, you may be eligible for a VA loan with 0% down.

However, the down payment is the not the only upfront cost of homeownership. During the purchase process there will be fees for the appraisal, inspection, and attorney, as well as closing costs, such as transfer tax stamps. Many condo buildings also have a move-in fee, so it is important to talk to your lender and real estate agent about what you need to budget to get to the closing table. Once you close on a home, repairs and regular maintenance will now be your responsibility. However, the financial investment gives you freedom to customize your home that renting does not.

When you are deciding whether to buy or rent, it is important to think about how long you expect to stay in the home. If you are only planning to spend a year or two in a home, then the equity you gain over that time may not be enough to offset the costs of buying and selling. Unless you are in a hot market with high appreciation rates, you may want to think twice before purchasing a home if you expect to spend less than 3 years in it.

Of course, life changes happen unexpectedly, so it is good to have an exit strategy if you do have to move earlier than you initially planned. If your property allows rentals, you can become a landlord and turn your home into an investment property. A home that appeals to a wide range of buyers and is in an established neighborhood that maintains home values shouldn’t linger on the market if it is priced correctly. When you are looking at homes, considering the resale appeal and whether it can be rented will help you feel confident in your choice.

Renting also has its drawbacks, such as yearly rent increases and the often high costs to break a lease if you need to move before the term is up. A great landlord or management company can make renting stress-free, but if there is deferred maintenance in the building, you may find yourself making frustrated phone calls to get things fixed.

If you have savings that can be used for a downpayment, a stable job that you expect will keep you in the area for the foreseeable future, and a good credit score, you may want to consider buying. If you are thinking about making a career move that could relocate you or you don’t yet have an emergency fund saved up, renting might be your best option. An agent in your area will be able to discuss the current market with you and show you what homes are for sale and for rent in your budget so that you can make an informed decision.

Whether you are looking to rent or buy, contact Joe to discuss your specific situation and to learn more about the Chicago real estate market: joe@joewrightchicago.com

Living in an urban area means that you spend a lot of time surrounded by densely packed buildings, miles of pavement, and many other people. However, there are still places in Chicago where you can get lost in nature.

Montrose Point Bird Sanctuary

4400 North Simonds Avenue

Neighborhood: Uptown

Steps from Montrose Harbor and Montrose Beach, the Montrose Point Bird Sanctuary is a great place to see migrating birds during spring and fall. Montrose Point juts out into Lake Michigan which offers visitors fantastic views of the Chicago skyline. The bird sanctuary is about 13 acres and there are plenty of additional walking paths nearby. On the western edge of Montrose Harbor, be sure to check out the cluster of birdhouses designed to give a home to purple martins when they spend their summers in Chicago.

Lincoln Park Conservatory

2391 North Stockton Drive

Neighborhood: Lincoln Park

When the weather turns cold, warm up for free at the Lincoln Park Conservatory. The conservatory consists of four connected rooms: the Fern House, the Palm House, the Orchid House, and the Show House. Each area of the conservatory is filled with beautiful plants and is a lovely place to enjoy a stroll, especially when there is snow on the ground outside. The conservatory also does seasonal flower shows, including a train exhibit during November and December.

Alfred Caldwell Lily Pool

125 West Fullerton Parkway

Neighborhood: Lincoln Park

After your visit to the Lincoln Park Conservatory, step around the corner to the Alfred Caldwell Lily Pool. It is tucked among the trees and you might miss the entrance if you aren’t looking for it. During the warm weather months, you will often see people sketching, painting, or photographing the pond, however, you don’t have to be artistic to enjoy the cool shade and relaxing atmosphere. Stop by for a quick walk around the pond or bring a book and relax on the rocks for an afternoon.

North Park Village Nature Center

5801 North Pulaski Road

Neighborhood: North Park

There are 46 acres of outdoor space for visitors to enjoy at the North Park Village Nature Center and an educational center that offers events and information. Wander the trails to enjoy prairie, woodlands, and wetlands. Bring your binoculars and a bird guide to get to know what animals share the city with you!

You’ve been looking at properties for months and have finally found one that is in budget and has the requisite number of bedrooms and bathrooms. You think it could be the one, but before you put in an offer, ask yourself these four questions to help you avoid buyer’s remorse.

How easy is it to get to where I need to be?

Proximity to transportation is important. Whether you drive, bike, or use public transportation, you have places you need to go. We recommend making a list of the places you visit in a typical month and figuring out how you would get from your potential new home to each of those locations. It is easy to lose track of the exact location of a home when you are visiting multiple properties in a day, so head back to the neighborhood to time the walk to the train or bus stop and to see whether there is plentiful street parking.

Does this layout fit the way I live?

When a home is staged well, you can walk in and imagine living there. However, the realities of daily life are often different than what appeals to us in a staged home. An important question to consider is where you and your family spend the most time. If the hub of your home is the kitchen, then having a breakfast bar or room for a kitchen table will offer room for people to congregate. An open floor plan could be perfect for people who love to entertain, but might not work if your family members need separate spaces to retreat to after a long day. Everyone lives in their space differently, so pay attention to what rooms you use the most and where the bottlenecks are in your current home.

How long am I planning on living here?

Life is full of surprises, so you probably don’t know where you are going to be ten years from now. When you are buying a home with the intention of only living there for a few years, resale value and appeal will be an important consideration for you. A unique property may be perfect for you, but will have a smaller buyer pool when you try to sell. If you are planning on turning your home into a rental property when you move to your next place, double check the condo or co-op restrictions about renting. Finding into a long-term home can be very appealing to people who dislike packing and moving their belongings every few years. The home may be perfect for you now, but it is important to think about whether the space will be sufficient as your life changes.

What upcoming expenses will this property require?

A quick way for you to sour on your new home is to discover that the expenses are piling up before you’ve finished unpacking. You will want to check the age and condition of the water heater, furnace, and other mechanicals so you can be aware of whether those are nearing the end of their expected life. Kitchen and laundry appliances should also be checked. Finding out when the roof was last replaced and when the electrical and plumbing was last updated will help you better understand what maintenance projects will need to be tackled in the future. If you are buying a condo or co-op, it is also important that the homeowners association is financially healthy and has been taking good care of the building. Deferred maintenance or low reserves could mean that a special assessment will be levied in the future.

 

Thinking about buying in Chicago? We’d love to help you find a home that is a perfect fit! Email Joe today: joe@joewrightchicago.com