Chicago Residential Investors Target Newer Homes
Although Chicago’s housing stock is often up to 100 years old, many real estate investors are focussing on houses less than a quarter century old. Newer homes, less than 25 years old built after 1990 are in high demand if it is investor grade.Investment Grade properties are homes for sale that can support good cash flows when managed as rentals. Prices supported by their gross revenues and net operating incomes. Typically single family homes have not been an asset class that has been targeted by institutions as investment grade. This is rapidly changing as private equity companies have been rapidly acquiring single family homes and taking them from REO to Rental. The intent of many of these institutional investors as well as many local investors is to target newer homes. The idea is simple newer homes typically have a lower CapX ( capital expenditure ) number than their older counterparts. Newer neighborhoods are also in high demand by renters
Investment grade residential properties tend to be priced at, or above, the 15th percentile price point for all properties on the market, in typical markets. In other words, if there are 100 homes, condominiums, and townhouses on the market, ranked from least expensive to most expensive, then the price of the 15th house from the bottom will typically reflect the price of an “investment grade property. This definition provides a reasonable benchmark in many towns, but may not apply equally well across all neighborhoods in the city. Historically, the 15th price point appears to offer the investor a reasonable rate of income. Over time, as supply and demand rebalance, one would expect rents to rise or property prices to drop. Once you get past the 25th-30th percentile however the price to rent ratio often doesn’t support positive cash flow. So although investors target newer construction homes they want homes priced well in working class neighborhoods not the McMansions and high end large homes north of 2800 sq feet.
If you are an investor check our list of homes that are all constructed in the past 25 years. These lists focus on homes under $250,000 which usually meet investment grade benchmarkts to support rentals income. Our lists are broken down by the 4 counties surrounding Chicago. These lists update daily with the newest properties that could make a great investment. Many of the properties would make good opportunities for investors looking to build a rental portfolio
Cook County Properties For Sale Built After 1990 ( Chicago Metro )
If you have a home that was constructed after 1990 in the Chicago metro area and are looking to sell, contact us we have buyers for off market homes to convert to rental. Properties do not need tenants and our investors will perform rehabs. Tell Us About your Home