Once upon a time, I enjoyed staying abreast of the latest trends: music, the stock market, and even technology. A little more than two decades ago, my old Macintosh computer was probably the first and maybe the only machine in the neighborhood. I could shower, shave, and walk the dog while my dial-up modem connected to the internet and a file took about two days to download but, what the heck—I was out in front of the crowd. As a growth investor, I also blindly bought dot-coms such as Pets.com. If you’re not sure how that bet turned out, just Google “tech stock failure”. I might have given away the ending there but, hey, we all make mistakes. The trick is to learn from them.
But when I set out to invest in Chi-town real estate in the late 1990s, impulsive buys had to stay off my agenda. If I was going to do this thing and do it right, careful research and detailed analysis needed to play a role in my strategy. I couldn’t randomly buy homes because the price seemed right or the seller had a full boat of tenants who paid the rent and took good care of the place. I had to go one step beyond when formulating my real estate investment strategy. Finding the best places for investing in residential property in Chicago became the top priority. My time and effort would take care of the rest.
Investing in Residential Property in Chicago: The Best Places to Look in 2022
More than twenty years later, I’m still settled in the Midwest and still scouting out alluring real estate deals in Chicago. One thing hasn’t changed. I never stray from my first rule of property investment: find undervalued homes to buy, renovate, and sell in either established neighborhoods or ones that are up and coming. I keep tabs on the local market and, in my opinion, these three locales represent some of the best places to buy houses in the Windy City.
There’s one thing that stands out about the Windy City’s real estate market: All budget sizes apply. As some neighborhoods (like Humboldt Park, for instance) get pricier and harder to buy into, other less-desirable areas improve and start attracting more investors. For the 2022 real estate market, Rogers Park is one of the best, undervalued neighborhoods to buy into for first-time (or budget-conscious) investors. Though home prices in Rogers Park have steadily risen over the last year—the current average is around $210,000—there are still many fixer-uppers for sale in the $100,000 range. Roland Park’s homes are typically older, pre-WW2 single-family homes and small apartment buildings, which can be great investment properties because of all the opportunities for updates and renovations.
Rogers Park’s schools consistently rank as some of the best in Chicago, which will attract a lot of young families looking to make their first home purchase. In addition, the close proximity of Loyola University opens up the possibility of renting properties out to students. Plus, Rogers Park is close to the lake, with a whopping ten beaches, meaning you could potentially invest in an affordable lakefront property to really maximize your rental or resale value. Overall, Rogers Park is looking to be the next Humboldt Park, which means you might want to move fast to invest in an affordable property before the market really takes off.
Speaking of Humboldt Park, this is still a neighborhood worth looking into if you’re trying to invest in a low- to mid-range property. Home prices have risen steadily over the past ten years, but there are still many diamonds in the rough available for affordable prices if you know where to look. Homebuyers have increasingly taken an interest in renovated homes in Humboldt Park as prices constantly creep up in adjacent Logan Square.
Finding real estate investing opportunities in up-and-coming neighborhoods of any major city involves following the money, and a fair amount of cash that has been spread around by developers. Connecting Logan Square to the north with Humboldt Square, the 606, an elevated 2.7 mile walking and biking path has spurred single-home construction in the latter’s eastern portion. The city designated a piece of Chicago Avenue as a retail thrive zone, offering tax incentives to small businesses that settle in the area’s western side. As new construction and infrastructure blossoms, investors can acquire undervalued properties and sell into the rally of rising home prices.
Avondale is a mid-range neighborhood that has been quietly gentrifying in recent years as people get priced out of more expensive areas like Logan Square and Wicker Park. Though it’s still considered a middle-class neighborhood, the average Avondale home price is in the $450-$500K range and steadily rising. The real value in Avondale, however, is its thriving rental market. Rental prices are higher than the city average—anywhere from $1,300-$2,000 per month is typical—and most Avondale residents are renters.
Avondale has a mixed urban/suburban feel, with lots of good schools and parks to appeal to families, as well as plenty of bars, restaurants, and entertainment for the adults. Public transportation is easily accessible with multiple Blue Line L stops, plus there’s easy access to I-90 for commuters. Many local investors believe that Avondale is poised to become the next Logan Park, with high-end home values creeping into the $2 million range and only getting higher. Avondale is certainly a neighborhood to keep an eye on if you’re looking for a mid- to high-end investment property, especially if you plan to rent.
Feed Your Strengths
A wide range of opportunities awaits buyers investing in residential property in the Chicago market but I’ve found that it’s best to find a niche and run with it. The properties that pack the most promise for me sit on the low end of the spectrum. I enlisted some help at the start of my real estate investing career by becoming an independently owned and operated HomeVestors® franchisee. The nationally recognized We Buy Ugly Houses® marketing campaign turns up leads on distressed properties that I can buy, renovate, and sell with reasonable confidence about the returns on my investments. With a couple hundred Chicago neighborhoods to choose from, I’ve been able to uncover gold among the ruins.
Contact HomeVestors today to find your own real estate treasures.
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