Hi friendly people! I need help assessing my renting vs buying options.

I live in Chicago. I’ve been living in my current space for three years renting a 1200 sq fr apartment 2 blocks from Wrigley for $700/mo (total rent is $1400 but I have a roommate.)

I’ve been considering buying a place for several years and haven’t pulled the trigger because hoa + taxes in most situations is over $1k.

For ref a nice one bed and one bath close to the lake is $230k avg hoa $500. But no separate ...

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There’s a lot more and easier to find rental deals than there are buying deals. On average Chicago has close to even rent v buy economics with the slight advantage to renting. It sounds like you’ve done the math using your current situation Eg you’ll never own a 2/2 for 1400 total cost, and even owning the 1/1 is hard to get near 1400. If you want the nicer unit, find the good rental with those upgrades, avoid the lifetime commitment to high taxes+HOAs. (This coming from an owner).

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Ahhh this msg is so heart warming to hear

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Keep renting for now so you can save a bigger down payment. In two years, buy a multi family, and rent out the other unit(s).

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Are you single? I’m afraid of moving to those areas for fear of feeling isolated. What is it like living in those neighborhoods as a single person? I went to high school in Albany park but lived in edgewater at the time.

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Keep renting! Don’t worry about what you think people expect at a certain age. Owning a home is not a good investment. You will now be responsible for every single fix in your home, your taxes and insurance are a drain, and you’ll be paying interest on your loan that you could be investing.

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A home is not an investment, it’s a home. You have to live in it. It doesn’t generate cash flow. Pays no dividends. It has a multitude of expenses. You only get a return on the appreciation when you sell…but people forget that upon selling, if they want to avoid being homeless, they have to turn right around and use that money to buy another home. People forget to deduct from that “profit” the years of taxes, repairs, maintenance, renovations, insurance, HOA/condo/co-op costs, real estate buying and selling fees, interest, and finally the cost of the new replacement home they move into next. In the end, after ALL of that…how much did this “equity” even reward you? One could argue you could rent, and use the extra money to put into real investments, and after a decade you’ll actually have more money than if you blew it on a money pit of a house, just for the sake of owning.

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In chicago as well. Ive owned now for 8 yrs and bought my first place at the bottom of the real estate bubble burst and bought again 1.5 yrs ago. I think if you plan to stay in Chicago, buying now might be a great idea bc of interest rates being so low. Mine was 4.5 in Aug 2019 and I just refinanced to 2.99 and my pmt dropped $500. BUT there is slso nothing wrong w renting...it just depends on ur long term plans.

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Yes there are HOA fees and taxes. But are you forgetting about the interest deduction? What about the equity you are building? Once you consider those, I bet your actual costs will be lower. On top of that, there is appreciation. I fully believe that home ownership is the path to create wealth. Otherwise, you can save a few bucks each month and never take advantage of the tax code for owning property

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But do you know about the Chicago real estate market? Home bales take more than 7 years to appreciate. Sky is not the limit with home values - especially in desirable areas of Chicago.

And what about maintenance costs? Those don’t translate to a dollar for dollar increase in value.

I am 30. My wife and I have a combined income of 200k per year. We plan on renting for the foreseeable future. I like knowing exactly what my housing cost will be every month. I don’t feel like I’m throwing money away. I feel like I’m buying the option to relocate when I want to and not having to stress about unplanned expenses. All my friends own and I make a lot more money than them. I don’t feel the pressure to buy cause homeownership doesn’t align with my values and goals right now.

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I bought in Chicago June 2016. I don’t regret it. I can deduct interest, and I need the deduction. I started at 4.25. Refi in 2018 to 3.75. Refi late last year 2.5.

What folk says about selling a condo now is true. There’s a lot of inventory and it’s selling for less than what folks paid in 2018 and 2019. I see that as opportunity to get a deal, if you plan on staying in Chicago for a while.

Example: I have a friend selling a 1/1 in river North with doorman and parking for $315K. She updated the kitchen and bathroom in anticipation of selling. It’s not the 2/2 you want, but you can’t beat her location. She’s selling for less than she paid.

Also you can buy out your PMI if you’re worried about that. Also you can always put down just 3.5 FHA or 5% conventional if you don’t want to past with all your cash.

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... dining area or no parking included. 2 bee and 2 baths (which is what I want) are around $400k on the lower end. Taxes are so high in Chicago, I feel like at my age I’m expected to buy but I can’t beat the rent and value of my current situation.

I am single, 30yrs, and annual income of $135k. I only have $30k for a down payment. My rental is comfortable but lacking a few wants ( bigger more modern kitchen + in unit laundry, assigned parking) but the low cost and huge space plus flexibility are hard to beat.

Should I stay and keep the entire apartment for $1200/mo or look into buying? Any help would be greatly appreciated!

I would love to live 2 blocks from Wrigley! I think I could stay there my entire life!

I'm in your boat. I live alone and I'm paying around 1300 in rent. The pandemic has caused me to want to buy after dealing with all the annoyances of working from home with apartment neighbors. The thing is, prices have been just soaring and rent has been steadily dropping with some good deals out there. I've decided to rent for another year but I'm also going to be searching everyday for opportunities.

Don't think I'm going to accumulate much cash. I'd rather keep that invested. I will likely borrow against my M1 finance account and pay it back at the 2% interest rate.

For my first home I don't want to buy too much home so hoping for a nice 2 bd/2ba at $250K max.

The location you're looking at is the reason you're seeing $400K low end. Try looking more northeast and northwest.

I've seen 2 bd 2ba close to lake going for $300Kish

The ones that are $300k have association fees greater than $800/mo.

As a single person I’m hesitant to move away from the lakeview / Lincoln park area - moving further north feels like I’ll be more isolated and at that point why not just move to the suburbs for a better deal?

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Context, when I came out of college I took the avalanche approach for student debt.

Now I am a home owner and my visceral reaction is to overpay my mortgage, but my IR is well below inflation (anchoring on this years estimates which I've seen quoted around 6%).

Is a mortgage where the IR is < inflation free money and my incentive should be to make the minimum payment or am I missing some other variables to consider?

*Assume I max all my tax advantaged contributions either way

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