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.
Purchasing a condominium and getting good returns from leasing it out is something that should jolt the interest of the everyday investor. Nevertheless, there are certain aspects that determine if what one buys is a good investment or simply a cathedral in the desert. To be on the safe side, it is imperative that an investor looks at the financial projections before committing himself to purchasing property.
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 finance your investment, you might want to find out if there will be any hidden fees during your period of ownership. Unforeseen charges usually come from assessment and association fees. Assessment charges usually cover shared areas within the condo compound. This includes garage maintenance, building improvements in the exterior section, landscaping, parking lot, hallways and the main lobby.
Location is the final aspect to bear in mind. Simply put, choice of location should be guided by demand. There are lots of potential clients in Chicago. Many companies and colleges are located in the area, contributing to an increased demand for rental units. Research is the sole thing to focus on before purchasing.
Purchasing a condominium and getting good returns from leasing it out is something that should jolt the interest of the everyday investor. Nevertheless, there are certain aspects that determine if what one buys is a good investment or simply a cathedral in the desert. To be on the safe side, it is imperative that an investor looks at the financial projections before committing himself to purchasing property.
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 finance your investment, you might want to find out if there will be any hidden fees during your period of ownership. Unforeseen charges usually come from assessment and association fees. Assessment charges usually cover shared areas within the condo compound. This includes garage maintenance, building improvements in the exterior section, landscaping, parking lot, hallways and the main lobby.
Location is the final aspect to bear in mind. Simply put, choice of location should be guided by demand. There are lots of potential clients in Chicago. Many companies and colleges are located in the area, contributing to an increased demand for rental units. Research is the sole thing to focus on before purchasing.
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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.
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