For long, many people have relied on real estate to hedge their liquid assets against the unforgiving uncertainties of the global economy. The boom in real estate is also as a result of the willingness of financial institutions to finance aspiring homeowners. This article explores the various dynamics surrounding the investment prospects of condominiums. It offers valuable advice to investors looking to exploit 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.
The most basic aspects you must analyze include maintenance expenditure, taxes and insurance fees against the annual rental revenue you expect to get. Such costs should be regarded as unavoidable liabilities as they water down profit. Other expenses you should include in your financial projections include advertising fees and the cost of procuring legal assistance during evictions. A tenant has just as much protection as a landlord under US law.
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 proceeding to finance your ownership, it is important to ascertain if you will have to spend extra for certain services as an owner. Association and assessment charges are the two most common charges in condo ownership. Assessment fees basically cater for services in common areas within the property. Examples include landscaping and works on the hallways, lobby, exterior, garage and parking lot.
The last aspect to consider is location. The property ought to be situated somewhere with great rental demand. Luckily, Chicago has got no shortage of clientele. There are plenty of students studying in the local tertiary institutions and folks in the employment sector. As long as you take your time doing research before deciding what to buy, everything should play out in your favor.
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.
The most basic aspects you must analyze include maintenance expenditure, taxes and insurance fees against the annual rental revenue you expect to get. Such costs should be regarded as unavoidable liabilities as they water down profit. Other expenses you should include in your financial projections include advertising fees and the cost of procuring legal assistance during evictions. A tenant has just as much protection as a landlord under US law.
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 proceeding to finance your ownership, it is important to ascertain if you will have to spend extra for certain services as an owner. Association and assessment charges are the two most common charges in condo ownership. Assessment fees basically cater for services in common areas within the property. Examples include landscaping and works on the hallways, lobby, exterior, garage and parking lot.
The last aspect to consider is location. The property ought to be situated somewhere with great rental demand. Luckily, Chicago has got no shortage of clientele. There are plenty of students studying in the local tertiary institutions and folks in the employment sector. As long as you take your time doing research before deciding what to buy, everything should play out in your favor.
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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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