Poll: Residents in Chicago...rent vs own???

[newguy2006]

I will be starting internship this year, for a total of 4 yrs of residency. I'm debating on whether or not to buy a condo vs. rent an apartment. I am single, so no other income than what i get from residency.

i'm crunching numbers here and it seems impossible to own a decent condo in chicago over 200K while also being able to afford other normal personal expenses (car insurance, gas, food, internet, cable, etc).

Just wondering if it's possible to own as a single resident, and if so, how much is your mortgage for? or is it impossible to own and live a normal lifestyle without sacrificing normal things like......FOOD. thanks for any input

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[cchoukal]

It's really hard to own here on a single resident's salary. at 40-45K per year, you'll qualify for btwn 150-175K. People will tell you all about these specific cases where they can get interest-only mortgages, ARMs, "physicians mortgages" (which really just amount to no-down-payment-and-no-mortgage-insurance." But at the end of the day, the bank will only lend you a certain amt of money based on your income and assets. a 150K condo runs about 1100/month, and then add property taxes (+/- $100/mo) and association fees (anywhere from $100-$400/month), and your looking at like 60-70% of your net pay. Tough to stomach if you also have a car payment and want a social life. Oh, and you can't get sh_t for a condo in chicago for 150K.

Anyway, everyone's priorities and financial details are different, but I looked long and hard when I moved here last year, and there was just no way on 42K/year to have a decent and affordable condo in a desirable neighborhood and still have enough money for food. If anyone else was able to do it (without supplemental income), I'd really like to hear how, cuz I'd love to try it.

 

[Sohalia]

I think those of us who are doing it have some other source of financial support, such as parents who will help with the down payment. There are condos available for under 200K that are decent, but if you want parking it will be another 20-30K. My parents are there scouting things out now and decided to up the budget given what they were seeing in terms of neighborhoods and the condition of the properties (I am a single female). Sounds like they may have something finalized at the low 300s. We'll put in a 50% downpayment and the mortgage and associated costs will be about half my monthly salary (about $1300). I'm concerned that that will make things tight, but I guess it's ok.
Oh yeah--if you want to be settled in a place you own before internship starts you'll have to act soon.

 

[cchoukal]

Single female moving into a sweet condo in chicago? What are you doing after the show? wink, wink... (kidding).

 

[EctopicFetus]

It is real hard to own a semidecent place to live in chicago on a residents salary.. Marriage makes it easier

 

[lateness]

used to live in chitown for years,, all around, downtown, lincoln park, and in my opinion, i would rent, only.. unless u plan on being there longer than 6 or so years, i have seen the market, at least for 8 years of living there, so i wuold say its worth it if your there longer.. but then again it depends on where you live. plus, i you wont get a nice place for less than 4 00,, (well nice for what i consider nice, everyone has different needs )

 

[Embryo2006]

I thought very seriously about buying in Chicago, but backed down after I ran the numbers. It would be very difficult--if not impossible--to afford a $180K condo on your own. Your mortgage might be $1150, but taxes, assessments, and parking run that number up very quickly. I would have been paying $1700-1800/mo for a place that wasn't nearly as nice or convenient as what I could afford to rent. Yeah, you can build equity and get a tax refund, etc, but month to month you get killed. I want to enjoy what little free time we'll have in residency and not be constantly worried about paying the bills.

 

[DrNick2006]

You won't build equity because your payments will all be on interest for the first few years. Your home will probably appreciate, but that is not a assured. You need to be sure you will live at a place for a minimum of 3 years to make it less exprensive then just paying the same amount in rent.

 

[cchoukal]

DrNick is absolutely right, and remember, too, that property tax and association fees go right down the toilet. Your property has to appreciate awfully fast in a few years to make up for these losses.

 

[newguy2006]

DrNick is absolutely right, and remember, too, that property tax and association fees go right down the toilet. Your property has to appreciate awfully fast in a few years to make up for these losses.

here's my dilemma. i'm from chicago...so i'll probably be here for the rest of my life unless i can't find a job when i'm out of course. however, if i buy i would only hold the condo for just the 4 yrs of residency then plan to sell it. what i've found is that it costs 1400/month for a mortgage(pkg incl.) plus taxes/assessments (450/mo), not including insurance, gas, electric, cable, internet, cell phone, etc. so it would be really tight to live for the next 4 yrs. however, i might make some good $$ if the condo appreciates.

then there's renting. i can find a 1BR for 1300/mo plus roughly 225/mo for rental parking plus utilities...which all would be the same as owning, the only difference in all of this is the extra 200 bucks a month i'd hold onto for not having to pay assessments (since i'd still have to rent pkg vs owning pkg.)

is it worth the extra 200 bucks/mo just to own and make some decent money after 4 yrs on appreciation? or should i just rent and have a less burden on my pocketbook? tough call...

 

[cchoukal]

I think that if you can't find an acceptable apt for less than 1300 plus parking then, yeah, I suppose the difference is so small you might as will bite it and buy. But I'd like the see the kind of condo and the neighborhood of a mortgage that costs 1400/month. My guess is that it's not too nice. And 1300 is a lot for an apt. I pay 1100 with off street parking and I live in a 750 sq ft fintage place in lakeview along the southport corridor. awesome neighborhood. No assessments, no property tax, no mortgage insurance, and no repair liabilities. This really is a tough decision, though. Obviously my bias is to rent because that's what I chose to do. I just couldn't find anything anywhere NEAR affordable in a decent neighborhood. For me, the monthly difference btwn rent and owning was more like 700-800, and that was still an apt in a great neighborhood vs a so-so condo in a boring/crappy neighborhood.

I suppose the other thing to consider is that after your first year, you might be able to supplement your income with moonlighting, which might change the equation somewhat.

 

[KluverBucy]

I think that if you can't find an acceptable apt for less than 1300 plus parking then, yeah, I suppose the difference is so small you might as will bite it and buy. But I'd like the see the kind of condo and the neighborhood of a mortgage that costs 1400/month. My guess is that it's not too nice. And 1300 is a lot for an apt. I pay 1100 with off street parking and I live in a 750 sq ft fintage place in lakeview along the southport corridor. awesome neighborhood. No assessments, no property tax, no mortgage insurance, and no repair liabilities. This really is a tough decision, though. Obviously my bias is to rent because that's what I chose to do. I just couldn't find anything anywhere NEAR affordable in a decent neighborhood. For me, the monthly difference btwn rent and owning was more like 700-800, and that was still an apt in a great neighborhood vs a so-so condo in a boring/crappy neighborhood.

I suppose the other thing to consider is that after your first year, you might be able to supplement your income with moonlighting, which might change the equation somewhat.

unfortunately in IL, you don't get your license until after TWO years of post-grad training. so you can't moolight until PGY3 year. it sucks.

 

[suckstobeme]

Yeah, I was in the same boat. In the end, I decided on renting for the following reasons:

1) Condos cost too much in Chicago and I can only get approved for 165k. That would buy a studio in desirable areas, and a 1 bdrm in OK areas (though it will get you a decent 1 bd in Oak Park).

2) Even if I could get a bigger loan, I dont know how I'd pay for it. I figure on a 40k salary, you take home something like 2200/month. With taxes, assessments and mortgage on a 200k place you're looking at 1500ish. That means 700 left for everything else. The only way to make it work on a resident budget is to have an interest only loan (which makes me uncomfortable) or put down one hell of a down payment (I'm still hoping I'll find my Sugar Momma).

3) I did the rent vs buy calculators, and I would save something like 7k after 4 yrs, which I would only realize upon selling the house, presumably when I graduate from residency. Is 7k gonna be a whole hell of a lot when you're making attending money? Doesn't seem to be worth the hassle.

4) If you spend 1400 a month on mortgage/taxes/assessments you can get an OK place. If you spend 1000 on rent, I bet you could end up with a much nicer place.

5) If you're planning to do a fellowship and might have to move out of the city, this is gonna weigh you down like an anchor. If you check the "time on the market" stat on some of these places, its getting to be longer (some are 9 months) but the prices arent dropping. I dunno; I'm no real estate expert, but I'd be afraid that I couldn't unload the place if I needed to leave.

6) Property taxes in some communities in Chicago are out of control. Maybe I wouldn't mind if I had kids that were using the schools or something, but right now I'm single and I dont need to be paying for Jr's fingerpaints and whatnot.

Just my two cents.

 

[Wrigleyville]

Where exactly are you doing your residency? If you don't need a car I'd encourage you to sell it. The amount of money you'll save on parking, insurance, gas is quite a bit.

 

[OUsooner]

Renting here at Cityfront Place, right off of Michigan ave on McClurg. Great location - got a 650 sq ft place for 1200 plus 200 for parking. The 1200 includes all utilities, including ac/heat. Only electric is not included (its about 15 bucks a month).

This is steep but I plan on stayin here only a year before I move a bit further outside the city or atleast to a location thats not in the middle of it all. Not sure how much time I'll have to enjoy the city but with weekends off (unless I'm on call) I figure I'll get at least a little quality time in the city.

My rent puts me on a tight budget, considering I like to blow it out on weekends, but I figure I'll patch things together. Buying really was never an option for me, as it would have put me in a SERIOUS financial crunch to purchase a decent place.