Tips on renting out a condo in Chicago?
May 10, 2010 12:35 PM   Subscribe

Tips on renting out a condo in Chicago? More details inside.

I may need to move to another state and now I'm stuck with what to do with my condo. It is a small 1000sq ft 2 bedroom / 2 bathroom in the Wicker Park area of Chicago. I bought it at the height of the housing boom & I can't afford to sell it at a loss so I'll be renting it out for at least 2 years and see what happens next.

- Any recommendations of rental agencies that'll handle everything?
- Or should I do it privately?
- Any tips on renting out a home? What're your successful tips? or horror stories?
- What would you charge for rent?

Nothing is set in stone, just trying to get ideas. Thanks
posted by cuando to Home & Garden (5 answers total) 1 user marked this as a favorite
If you're leaving the state, I highly recommend using some sort of management company to handle the condo. I'm renting out my condo in Lakeview and there have been all sorts of random issues that have popped up that I couldn't have anticipated. Everything in the unit and with my tenant has been fine, but I had to take half a day off work to get new keys to my tenant after there was a building security issue. It wasn't something I had a lot of warning on and it wasn't something that could wait.

I charge $1200 for a new, 600 sq. ft. 1BR condo in Lakeview FWIW. It's been pretty easy to rent out at that price. It doesn't cover my entire mortgage payment by any means. I've rented it to two different tenants I found on Craigslist and I had a lease signed within two weeks of posting.
posted by awegz at 1:00 PM on May 10, 2010

I have done this a few times, and have a lot of friends and colleagues who have done it, and I also have a few people whose places I have "managed" while they were not local and were renting out their places. I have never looked into a management company myself, I have heard from people that hiring a management company can get pretty pricey - everyone I know who has considered it has decided against it. I think that example I remember was one months' rent to advertise it and rent it out as long as it didn't take more than a certain amount of time, and then some percent per month. They would accept the rent, deduct the fee and forward it. Also, I think that they used only their overpriced vendors for maintenance, etc.

Do you know anyone locally whose judgment you can trust and who can act as a local resource for you?

If you decide to go it alone. figure out everything that can go wrong with your condo - locksmith stuff, plumbing, electrical, appliances, handyman type stuff, legal issues with your tenant, etc. - and find a vendor for those things now. Ask around to friends, try Angie's List, etc. Try to find someone who will cut you some sort of deal. You do not want to be at the mercy of whoever you can track down when there is, for example, a plumbing leak at 3:00 am.

No real idea on the current rent, but it probably depends how nice it is and how close to transit it is. Check Craigslist - maybe between $1000 - $1500 a month? Also, when I have rented places I own, I have deliberately asked for a slightly lower rent to get lots of interest and accepted tenants who presented very well and were willing to put down a larger security deposit. I told it to them straight - I will charge you less per month if you have good credit, have good references and will give me a larger security deposit, which you will still entirely get back if you don't damage the place. And I specifically told them that I would not charge for little wear and tear and things like that.

Good luck.
posted by iknowizbirfmark at 2:25 PM on May 10, 2010

OK, I did this a little more than a year ago. I moved to Boston and rented out my condo in Evanston.

Management companies: I was advised by everyone to get a management company. When I looked into what they actually did, though, I couldn't really justify the monthly cost. They collect your rent, and when there's a problem with the apartment, they call the appropriate service and charge you for that. I decided to skip it, and everything went fine. The tenants mailed me the rent, and one time there was a maintenance issue, I handled it all over the phone.

However, if your unit has a lot of problems, you could have a different experience. If you're unsure about this, you can start out by getting a friend to "manage" it, e.g. agree to go to the apartment if you need someone to do that, then if it seems like there's actual work involved, contract a management company. Once you start a contract, though, it's going to be hard to get out of it.

Rental agents: Before I left, I procured my own tenants by putting ads on Craigslist. I met them and checked their credit history and criminal backgrounds. By doing this myself, I was fairly certain I'd have decent tenants.

Now, I'm out in Boston, my tenants have moved out of state, and I'm forced to rely on a rental agent to find me new tenants because someone's got to show the apartment. I know it's a tough market, and I don't know if my agent is incompetent, but they haven't gotten very many showings to my apartment in the last couple of months. So, while I can't blame myself for hiring this agent, I did make one clear-cut mistake: I signed an exclusive contract with the agent. I'm probably stuck with the agent. I found out that there are in fact rental agents that offer non-exclusive contracts. If you need to hire a rental agent, go with one of those.

Also, ask them if they do rentals full-time or if it's something they do in addition to real estate. They might dodge the question, but also ask how many apartments they've gotten rented in the last three months and how many they're working on. I wish I had known this.

Pricing: Look at Craigslist for apartments with similar characteristics in the area. Price it close to those, but obviously, cover as much of your mortgage, association fees, and taxes as you can.

Move-in/move-out: Make sure you take pictures of the apartment before your tenants move in and get them to sign a document recording all of the existing damage. I had really nice tenants, but they moved out in a hurry and didn't clean, and they damaged the floor. I don't think I'm going to run into a dispute about the security deposit, but I feel good knowing that I have the document and pre-move-in and post-move-out pictures in case I do.

Dealing with the lease ending from a thousand miles away: This is kind of hell. I have to accept third-party observations about everything. When I get new tenants, I'm probably not going to be able to meet them.

Also, the selling option is gone now. I have to rent it out again because if I tried to sell now, it would sit vacant for several months which would be extremely expensive. When I left, I thought there was no way I could sell at a loss. If I were to do this over again, I'd get rid of it before leaving.
posted by ignignokt at 7:49 PM on May 10, 2010

Thanks all for the advice. All of it very helpful

ignignokt - Can you explain this statement some more?

"Also, the selling option is gone now. I have to rent it out again because if I tried to sell now, it would sit vacant for several months which would be extremely expensive. When I left, I thought there was no way I could sell at a loss. If I were to do this over again, I'd get rid of it before leaving."

Wouldn't your place still have sat vacant when you moved in the first place?
posted by cuando at 7:30 AM on May 11, 2010

That is true. However, I might have held off on the move and taken the time to get rid of the apartment had I thought of it as possibly my last practical chance to sell.
posted by ignignokt at 7:55 AM on May 11, 2010

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