A mistake we commonly see investors make is buying the wrong property. Before you invest in a residential Chicago rental property, you need to analyze its location, cash flow potential, and condition. Don’t buy a property just because it’s advertised as “turn-key.” It might not be to property standards or codes. Don’t buy a property just because it’s cheap – that could mean it needs major work or it’s in a dreadful location and you’ll have a hard time finding a great tenant.
Buying the wrong investment is an expensive mistake, and one of the reasons so many investors make it is because they’re lone rangers – trying to do everything themselves. To successfully analyze whether or not a rental property in Chicago will be a success, you should get advice from a professional property manager.
This is our area of expertise. MF Cashflow has the experience needed to find the property and know if it is a good investment. We are not only named the #1 property management company in the Chicago suburbs but we are also a full-time real estate office that can assist in finding the right property for solid cash flow. We can find great rental properties in both Chicago and the Chicago suburbs.
Investment Value and Expenses
To determine whether or not a rental property can be a success, you need to know how much value is in your investment. At MF Cashflow, we keep a list of investment property opportunities on our website. You can check out all the homes we have for sale right now, and when you click on those homes, you can see a detailed analysis that includes costs and expenses.
This is important. Study the proforma with that analysis and understand it before you buy.
Check out the property taxes on any property you are considering. Some communities have very high tax rates. Taxes are going to be an expense, and we get it – no one likes paying taxes, especially not here in Illinois where the property taxes can be ridiculously high.
You want higher cash flow. We are here to help you achieve that. Your balance sheet will appreciate it.
Pay Attention to Property Location
Another good tool when you’re analyzing the success of a potential rental investment is the property’s location. Stay away from neighborhoods that you don’t know and can’t trust. The success of your rental property depends on finding and keeping good, reliable tenants with little turnover. Know your market and your neighborhood. This is about more than just apartment management; rental management is also about neighborhood and tenant management.
Property Condition and Renovations
Always avoid buying a property that’s received shoddy renovations. You’ll have a hard time finding any success with those properties. Rentals that need a lot of repairs do not make good investment properties. Check the property’s condition before you buy and make sure you aren’t going to have to put in a lot of work in order to earn any money.
At MF Cashflow, we have a 39-point checklist to make sure the property makes sense. We look at the plumbing, roofing, HVAC systems, electric, and the foundation. We make sure everything is up to code. It’s a good idea to have a professional inspection before you buy.
Beware of Over Market Pricing
Over-paying for an investment property means you didn’t do your due diligence. When you’re analyzing whether you can be successful with an investment, make sure you know what you’re paying for and whether that price is in line with the current market. You must know what you’re buying and you have to know what you’ll earn in rent. This is where the expertise of a local Chicago property management company is crucial. Take some time to do some shopping and ask a lot of questions. We recommend that you be a PIG – Professional Information Gatherer.
A successful Chicago rental investment is a high-quality property that performs with the help of a high-quality Chicago property management company. This is what leads to the best cash flow and ROI.
MF Cashflow can be your full-service real estate management expert. We have systems in place for owners and tenants. We know what it takes to limit vacancies and keep tenants in place. If you need some help analyzing whether or not a rental property will be successful for you MF Cashflow can help.