Rentberry: Six Best Neighborhoods for Investment Opportunities in Chicago

Back in the 1920’s, a group of researchers from the University of Chicago sat down and talked and divided the windy city into 77 community areas. Almost 100 years later, a dedicated team of Rentberry sat down and talked and realized that you might need a guide on investment opportunities in Chicago. That’s how this piece of writing was born.

Those with a wealth of experience in property management would agree that location of a rental property is what makes or breaks your buy-to-let business. In nearly all cases, an average apartment in the right neighborhood will pay off faster than a luxury one in the wrong neighborhood. So grab your chance to learn the hottest buy-to-let locations in beautiful Chicago.

In case you don’t know much about this city, here’s what you need to learn first. Chicago is considered the 9th most expensive American city in terms of rent – the median rental price for a 1-bedroom property is $1,970 per month. What’s more, it is the third most populous city in the US trailing only NYC and LA (today’s Chicago is a home to 2,720,546 people). And finally, it is believed to be the most beautiful city in the country – according to a subjective yet trustworthy opinion of Oprah Winfrey, Frank Lloyd Wright, and many others.

Is It a Good Idea to Invest in Chicago?

Absolutely. First and foremost, rental prices in Chicago have been constantly growing in the last 10 years (and there are grounds to assume the trend will gain momentum). Secondly, Chicago is the city of renters – over 54% of the local population are renting their homes. Thirdly, being a property owner in Chicago is relatively cheaper than being a renter.

“Yes, it is a great time for investment because there is still upside in some areas. There are certain neighborhoods in Chicago (West Town, Jefferson Park, Humboldt Park, and Garfield Ridge) that have not seen the price gains, but that is starting to change as it’s beginning to catch up the national average now.”

Carlson-Klein team from City Point Realty

“The Chicago rental market is strong. Corporate movement into the central business district continues to draw skilled labor closer to the city center. While Class A development in neighborhoods such as River North and the West Loop may be delivering more supply than the current demand can meet, Class B and C apartments just outside the city center continue to push rents and maintain occupancy over 95%.”

Victoria Michael, Broker Associate at Kiser Group

West Town

Median Rent Price for 1-bedroom property – $1,570/mo
Median Resale Price – $790,000
Price increase in last 3 years – 14%
Put yourself in a renter’s shoes. What would be your major criteria for choosing a neighborhood? Chances are good that local amenities, crime rate, and livability score would top the list. Believe it or not, but West Town succeed in each of these points. It’s got a high livability score – 77 out of 100, local crime rates are 60% lower than Chicago’s average, and it’s awarded A+ for the variety of amenities. The odds are good you’ll have plenty of tenant applications vying for your attention.

Uptown

Median Rent Price for 1-bedroom property – $1,250/mo
Median Resale Price – $840,000
Price increase in last 3 years – 22%
Located right north of expensive Lakeview, this neighborhood is famous for its impressive jazz scene, close proximity to the beach, and relatively affordable housing. Given the ongoing increase in local real estate prices, this spot on the map of Chicago is sure worth your attention.

Edgewater

Median Rent Price for 1-bedroom property – $1,100/mo
Median Resale Price – $601,000
Price increase in last 3 years – 32%
They say numbers speak louder than words, so let me use this rule on behalf of Edgewater. In fact, this neighborhood can boast the lowest rate of days on market in the entire Chicago. According to statistics, it only takes 44 days for a property in this neighborhood to be sold. Now add to this local prices which increased by 32 percent in the last three years, and you’ll understand why farseeing landlords are massively flocking to the Edgewater.

Logan Square

Median Rent Price for 1-bedroom property – $1,270/mo
Median Resale Price – $525,000
Price increase in last 3 years – 3%
Let me tell you how a dream of any property investor looks like. You come across a neighborhood with affordable resale price and above-the-average rental price. You buy-to-let and see a high return on investment before you even know it. Raise your hand if it sounds like a plan. The good news is that the opportunity is real. Numbers don’t lie, and they tell us that Logan Square can make your landlord business exceptionally profitable.

Jefferson Park

Median Rent Price for 1-bedroom property – $1,050mo
Median Resale Price – $257,000
Price increase in last 3 years – 12%
According to real estate experts, today’s Jefferson Park is a great buyer’s market. Compared to many other areas of the city, local housing prices are still affordable (and stable), and the neighborhood boasts of local amenities, great transport hub, and an array of parks. As real estate prices in Chicago are on the uptrend, any neighborhood struggling against the stream is definitely worth attention of a smart investor.

Humboldt Park

Median Rent Price for 1-bedroom property – $1,050mo
Median Resale Price – $85,000
Price increase in last 3 years – 33%
In case your budget is limited, it doesn’t mean you should give up on your investment dream. All you need is to take a closer look at Humboldt Park. As locals confirm, the area is getting plenty of new constructions, which means the housing market is on the rise (a growth of 33% in only three years is a living proof of this fact).

But What About Those Famous Locations?

If you are new to real estate investment and property management, you’re likely to think that owning a rental property in areas like the Loop, Lincoln Park, or Lake View is the least risky and most profitable thing that could ever be happened to you. However, monthly rental prices in these areas are only $200-300 higher, while resale prices are twice as high compared to West Town or Up Town (a median sales price in Lincoln Park is $1,578,000, and it’s only $790,000 and $840,000 in West Town and Uptown correspondingly).

Here’s what Victoria Michael says in this regard:

“The Chicago rental market is strong. Corporate movement into the central business district continues to draw skilled labor closer to the city center. While Class A development in neighborhoods such as River North and the West Loop may be delivering more supply than the current demand can meet, Class B and C apartments just outside the city center continue to push rents and maintain occupancy over 95%.”

Hopefully, we’ve helped you choose the right neighborhood for your next (or first) property investment. And in case you still have doubts, remember that Chicago is known for the friendliest people, most beautiful skyline, and the tenderest winds on planet Earth. Your prospect tenants won’t resist renting their next home in such a great city.