The Windy City seems to have something for everyone, combining a rich history, diehard sports fans, and a culture that mixes rust-belt blue-collar with chic socialite. There are hundreds of reasons why people love Chicago, but what makes it a fantastic spot to invest in? Buying a house in a popular city is known for being pricey, but here are some reasons we believe Chicago is the perfect place to invest in:
Major holiday destination
It’s one of America’s major tourist hotspots, with TripAdvisor awarding it the 7th most popular destination in the U.S. Indeed, last year Chicago’s number of tourist visits hit a record high of 54.1 million. This number shows Chicago to be a spot people won’t lose interest in anytime soon. It will also help to drive rental prices up and ensure that you have consistent renters.
The best investment yield
Recent research found that, of all the top holiday destinations in the U.S., Chicago ranked number one for the best value in property investment, with a yield of 8.66%. The yield is a measurement of the future income on an investment, based on the investment’s cost or market value.
Chicago’s yield just beat out other locations like Key West and Orlando. San Francisco, on the other hand, proved to have less than half that percentage yield, making it not nearly as attractive an investment location. When looking at a property, you have to look past your emotions tied to it and at the hard numbers – will it pay off in the long run? Investment yield is what it all comes down to and, out of America’s top 10 tourist hotspots, Chicago ranks best for it.
Young average age
The average age makes a huge difference when considering an investment spot. The older generation are more likely to own a home and therefore won’t have much interest in renting your property, so an area with a high median age wouldn’t be great to look at. Chicago, on the other hand, has a median age of 34 years old. When breaking the stats down, they show that 18% are between 20 to 29, higher than any other 10-year age range. This younger age range are much more likely to be renters instead of buyers, which is perfect for you!
The area you choose to buy in makes a difference – which, to be fair, goes without saying. For example, Hyde Park is an area close to UChicago. It follows that this area would be popular amongst students. This would also affect the type of property you’re looking at. Students are more likely to be after a place with many rooms and lower prices. Compare this to the young families of Beverly or Edgewater. They’d be after less cramped quarters and more interested in backyards and proximity to schools.
Low mortgage rates
At the moment, mortgages in Chicago have begun to inch lower. While the rates were even lower last year, they rose soon after and are only now starting to go down again. The average fixed rate mortgage rate in Chicago is now 3.98%, which is lower than the national average of 4.04%, making it a more attractive place to apply for a mortgage.
Mortgage lenders are keeping rates low at the moment to attract more homebuyers. However, it pays to do your research. The numbers listed above are just an average, with individual mortgage lenders offering higher or lower rates than 3.98%.
Chicago is a city beloved by a lot of Americans and tourists from around the world. Whether you plan to buy a house for long-term renters or join the growing Airbnb market, there are many good reasons to invest in Chicago.
Author Bio: Jennifer McDermott has over 12 years’ experience analyzing consumer trends in the travel and lifestyle industries, and now is the Consumer Advocate at personal finance website finder.com. Jennifer loves to uncover interesting findings and issues to help Americans find better deals.
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