As a real estate investor, I like to keep my finger on the pulse of public opinion when it comes to housing and neighborhoods. If people start flocking somewhere, it definitely raises the question of whether it’s an up and coming Chicago neighborhood that poses a good opportunity for finding great investment properties. So, it was a pleasant surprise when I saw that my old stomping grounds of Avondale was named as one of the Top 10 U.S. neighborhoods to visit last year by Lonely Planet. And, let’s not forget its appearance on “The Grid.” But, it’s not just Avondale that’s drawing attention as we head into 2019. I have my eye on several Chicago neighborhoods that I think will be worth investing in as we move into the New Year. Let me share what I know.
WHERE ARE THE UP AND COMING NEIGHBORHOODS IN CHICAGO?
We live in a large, diverse city and each neighborhood has its own special flavor. It’s easy to find information on how Chicago’s real estate market is faring as a whole, but you should be drilling it down to the specific neighborhoods that hold the most investment opportunities. With each of these listed here, be on the lookout for the ability to purchase at a reasonable price-point, add value to the property, and either sell or rent with good margins.
- Avondale. Let’s start by looking at my old neighborhood of Avondale. Even before Lonely Planet’s backing, this northwest neighborhood was poised to become a hotspot for homeowners and, by extension, investors. Avondale has a large working-class population and a mix of condos, bungalows, and two-flats. It may be further out of The Loop than some people like, and a little less hip than Logan Square, but the area does benefit from great food and good transport links. Besides, cheaper prices and rents could draw out Chicago’s swelling population as gentrification continues up Milwaukee Avenue.
- Roscoe Village. Neighboring Roscoe Village has been drawing attention from young couples looking to move out of the city center for the last few years, but there is still time for you to get involved in the action. This neighborhood has plenty of single-family homes for investment left that need some TLC to make them more inviting to Chicago’s Millennial generation, keeping the area in up-and-coming status—for now. You just have to know how to find them. And, prices here are almost as cheap as Avondale, with buyers able to pick up “ugly homes” for a very reasonable cost. Rents are nothing to sniff at either, and landlords who buy at the right price can expect to achieve a potentially solid cap rate on their rental properties.
- Pilsen. Much like the Chicago property market of late, the popularity of Pilsen seems to fluctuate rapidly. It started making a comeback by late 2017, however, and I’m expecting this southwest neighborhood to blossom in 2019. Pilsen boasts an array of single-family homes and multi-family buildings. It is also home to the University of Illinois at Chicago and the UIC Medical District, so there’s a ready pool of students and young professionals as renters for your with a buy-and-hold strategy. Median sales prices have really jumped in the last twelve months and median rents are looking good, too. If you find an investment opportunity here, you’re not likely to have any trouble making a good margin whether rehabbing and selling or renting it out—for a little while longer, anyway.
THE BEST CHICAGO HOUSING SECTOR TO LOOK OUT FOR
Although Chicago is still the only global financial center with an undervalued housing market, we have been seeing a slow but steady rise in prices over the last few years and the Chicago real estate forecast is looking up for investment potential. Of course, the luxury sector has been over-built and, with Chicago property taxes some of the highest in the county, it’s probably not the safest bet. But, the affordable and mid-priced housing markets remain strong, especially for those who want to buy, renovate, and sell.
For investors like me who like to give something back to the community while making a profit, “ugly houses” should be your target. In the long run, these older, smaller homes offer a much better return on investment. And, with the final installment of Chicago’s property tax hikes taking effect this year, many of the older neighborhoods that felt the pinch after the last installments could feel a punch this time around. As a result, many residents may be looking to sell quickly and take a discount on the full market value. This leaves enough budget to rehab the place into the dream property for Chicago’s growing Millennial population who is moving in.
Finding the Qualified Leads on Distressed Houses in Chicago
There are a couple of sources you can use to find distressed properties in Chicago. Chicago’s forfeiture program and the Cook County Land Bank Authority are frequently cited as great hunting spots. But, an influx of investors has made it increasingly hard to find a good deal. In the last couple of years, I’ve shunned these kinds of programs completely.
Instead, I have leads coming to me looking for a quick and straightforward sale. As an independently owned and operated HomeVestors® franchisee, I’m able to leverage the nationally-recognized “We Buy Ugly Houses®” brand to my advantage. Marketing this brand has helped HomeVestors® franchisees like me close on over 85,000 homes since 1996.
If you’re looking to find distressed properties in these neighborhoods, speak to HomeVestors today.
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