Our top 3 tips for navigating the 2022 Chicago real estate market

“What are your best real estate investment tips?” We are asked this question constantly – and for good reason. Our “tips” constantly evolve with the ever-changing Chicagoland real estate market. Today we are focusing on three of our latest investment tips. 

1) Are the Chicagoland suburbs a good investment right now?

The short answer is yes, as long as you have a long-term strategy! One aspect of the real estate market we know to be true is that there is a pendulum that swings between the city and suburbs in terms of interest and overall market strength. For the past 15 years the city market has seen crazy huge growth while the suburbs were not nearly as strong. In 2020, fueled by the pandemic, the pendulum rather quickly and very forcefully swung toward the suburbs, and I anticipate it staying there for at least the next seven to 10 years. 

So, even with the current craziness in the suburban real estate estate markets, I wouldn’t say you are buying at the “height” of the market. We anticipate suburban demand for many years to come. 

2) I can’t find what I’m looking for: should I buy a lot and build?

If you know me personally, then you know I am a huge advocate for customizing a home! I have done so several times, and am currently in the midst of renovating a lake house! As such, I am also experiencing all of the trials and tribulations that go along with renovating a home in 2022! Our start date is about a year delayed already, and we are significantly over budget due to the ever-rising cost of materials. 

Knowing all of that, if you have the time and budget to tear down and start from scratch, then by all means do it! But, if you are looking for faster and less expensive results, consider a remodel. You still get the customizations you are after, but with significantly less risk. Find a property with great bones in an amazing location (real estate 101 is still true!), and renovate. And remember: most buyers want move-in ready, so you may even have more negotiation opportunities. THIS is a great value play! Plus, we have contractors on speed dial that can help estimate the time and costs associated with your vision.

3) What about a short-term rental (AirBnB/VRBO) investment property?

I totally understand the allure of  a short-term rental investment property! But, I strongly advise you to do your homework before going down this path. Chicago, for example, is really cracking down on short-term rentals and most condos at this point have banned them. If I were going to buy a short-term rental property, I would buy a two-flat and either rent out both units, or live in one and rent the other. With a two-flat you have more flexibility and freedom than a condo. 

In summary

In summary, when it comes to the current market, my advice is all around timing: don’t be afraid of investing in the suburbs in this market. The same goes for customizing a home. If you are OK with long and expensive construction, then tearing down and rebuilding makes sense. Otherwise, renovate the existing home for a faster, cheaper payoff. And, if you are considering a short-term rental property, I urge you to consider a two-flat over a condo because of the added flexibility and freedom.