to those of you who own a condo?

Question

how much is your income before tax? how much downpayment did you put? i just want some ideas about buying a condo.... i'm buying one in Chicago

Answer 1

i STRONGLY suggest pencilling out every aspect of this decision to and through what it will look like on your income taxes AND you estimated cash flows BEFORE you make an offer.

Every real estate deal is different. Half the numbers change from property to property, so you have to work with your specific deal and what it's figures will likely be.

If you do not know what the likely figures will be, that in itself is evidence that you should not do the deal.


There are lots of web sites devoted to rental real estate. If you haven't discovered at least six of them already, please use google to find them.

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From my experience owning just such a property, I can assure you of the following:

1. rents are a function of the level of rents in the area, your specific property, it's cleanliness, and your rental agent. They are not a function of how much you paid -- tenants do not care how foolish you were when you bought, only for what they are getting and could get elsewhere.

2. small owners [fewer than eight or so units] pay a lot higher percentage of the gross rent to their agent than large owners [fifty units]. Further, you'll likely have trouble finding a rental agent who is both effective, fairly priced, and honest. [The leading dishonest activity is taking kickbacks on repairs.]

3. It is very difficult in most markets to find good properties that you'll make money on with less than 20% down. And it is very difficult to make a good rate of return on your down payment from rent. Where owners MIGHT clean up is on selling the property five to ten years down the road.

4. This leads to the observation that many if not most profitable properties have something wrong with them. The profitable type of 'something wrong' is one that you personally fix using the skills you have, your money, and your time. Every other kind of 'something wrong' suggests that you not buy the property UNLESS you are getting a discount of at least 125% the Means Guide's estimated cost to repair or replace. If you do not know what a Means Guide is, please check (go visit) your local public library.

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Summary: owning a rental condo is a way for you to make many, MANY mistakes -- all of which will cost you money. Yes, it is possible to come out well on a rental condo, AND only the very lucky or well prepared will do so.

Answer 2

You can go to the web site below and click on BUYERS and search to see condos in Chicago and what folks are doing. You also can type in the address of the place you bought and see how it looks from satellite.