Questions and Answers
Your Questions About Townhouses For Rent In Chicago
I wanted to move out of my townhouse complex badly, I signed a lease that ends sept 9, 2006?
I want to move June or July 2006. I was wondering have anybody out there ever broken a lease and what was the outcome. i am hoping it isn’t bad since i only would have 3 months left. if anybody have came up with any good excuses let me know. thanks !!!
Try to cut a deal with the landlord. Maybe find someone to take over the lease.
I did this in Chicago and it worked out fine; I found someone to stay in the apt for the rest of the lease term. I agreed to split one month with the new tenant, then he paid the rest.
I “broke” a lease in NYC, mostly b/c the landlord was in serious violation of housing codes, laws, etc. I tried to be reasonable and deal with the guy, but he would not budge. I sued him in housing court and left the unit with 3 months on the lease. He never came after me for the last three months, but he kept my deposit (which he was entitled to do; luckily the rent I withheld was in excess of the deposit, so I came out on top). Also, he lived outside of the country and coming after me would have been a huge waste of his time.
Try to avoid “breaking” the lease. It’s just a lot of hassle and expense. Plus, the landlord will keep your deposit, probably charge you for cleaning and repairs, and likely sue.
i’m lookin to buy a house whats a good location next to chicago ?
As housing market continues to slump, if you don’t plan to delay your plan, please interview several and pick a good realtor or agent.
Bad ones will talk you into buying the largest property at your credit limit. Good ones will find you a good deal (Sellers are offering discount and incentives now).
Try to stay away from Adjustable Mortgage, because 30 year fix mortgage rate is very low right now. There is no reason to use Adjustable loans except fatter commission for loan agents.
Interests only loans are not good iether. Mortgage payment consists of two parts: interests and principal. Interests are like rent, which doesn’t add to the equity to your house. It simply disappear as your pay it. If you want to use interests only loans, might as well rent, especially during market downturn, because housing price won’t appreciate.
Finally, for tax benefits, talk to your CPA or tax accountant. Do not consult finance with realtors or agents. They get commissions when you sign the check!
To determine if the houses are good value:
How to value a property during market downturn?
Housing market continues to slump. Now we can calculate true value of a property easily. As price decline, we don’t need to guess and factor in the potential price appreciation while calculating home value. Without the guesswork, figures are more accurate.
Let’s use following example:
Today, a typical 15 years old, two bedrooms condo/townhouse is priced around $500,000 and $550,000 in Sunnyvale, California. Rent for similar condo/townhouse is $2000/month.
If you are a home owner, $2,000/month in rent means $20,000 a year in profit ($24,000 per year in rent, minus $4,000 maintenance costs). A $20,000 income is equilevant of owning $400,000 bonds or CDs, because current yield of 30 Years U.S. Treasuries are 5% (5% of $400,000 is $20,000). Bank CDs have similiar yields.
In our example, the two bedrooms condo/townhouse is 20% to 25% overpriced. They should be priced at $400,000.
It is interesting to note that if we redo the calculation from buyer’s perspective instead of seller’s perspective, the figures are even more shocking.
Mortgage payment consists of two parts: mortgage interests and mortgage principal. The interests portion is similar to rent. If you pay interest, it disappears and doesn’t add equity to the property. To fully simulate characteristics of renting, we assume buyer will apply for a zero down, interest-only loan.
It turns out that rent of $2000/month is equivelant to mortgage payment of a $340,000 loan at 7.0% APR. And comparing $340,000 loan to $500,000 or $550,000 price tag, from buyer’s view, the two bedrooms condo/townhouse is 30% to 35% overpriced.
One may ask, why is there a discrepancy between two perspectives of the buyer and owner?
The discrepancy is a result of 2% differences in interest rate that buyer borrow comparing to yields of bonds and CDs that owners would get. We understand that buyer would always pay more. That is the premium of buying to own. However, looking from home owner’s perspective, current housing market is probably 20% to 25% overpriced. We recommand investors to wait for a better entry point.
Living in Chicago, Ill?
I am planning a move to Chicago, I got a transfer there. I am wondering what neighborhoods I should look for housing. I am 26 year old typical east coast yuppie guy. I’m not worried about expenses yet, I just need to know what neighborhoods are nice to live in and are within close proximity to the city proper. I’m looking to rent a 1 or 2 BR apartment. Anything appreciated!
I like Lincoln Park and Wrigleyville. Lakeview and Orland are a little familyish, but still great.
When you’re ready to find a place, check out the Chicago real estate site below for all the houses, condos, townhouses and apartments that are available in the city with a lot of other information about Chicago too.
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