When you’re ready to consider buying a condo in Chicago, there are a few questions you should ask first. You may think you’re ready, but maybe you’re not quite there yet.
Buying a condo is a huge investment and not something to take lightly. It will likely be one of the largest financial transactions of your life. Before deciding to buy a Chicago condo, make sure you understand the answers to these five questions.
Is buying a condo Good Investment?
Before jumping in with both feet, it’s best to know if a condo is a good investment. When buying a condo for personal use, it can be a very good investment. It’s certainly better than paying rent, in most situations.
When you buy a condo in Chicago, you won’t’ deal with the same maintenance and home improvement costs as a home. In addition, you’ll likely gain access to valuable amenities within your building.
Figuring out if a condo is a good investment isn’t black and white. Some Chicago condos may be a very good investment, while others may not be.
The simplest way to know if the condo you want to buy is a good investment is to look at the value of the property. If it’s worth more than the price you will pay or it’s anticipated to go up in value, it will likely be a good investment.
Of course, you also have to consider a few other factors when buying a Chicago condo for personal use. Since you’re not trying to make an income by renting or flipping the condo, consider the following:
- How high is your interest rate?
- What are the Condo Association Fees?
- Can you make improvements to the condo and increase the value?
- The answer to these questions will help to determine if a condo is a good investment.
- What is the average condo association fee in Chicago?
When you buy a condo, you will need to pay a COA or Condo Owner’s Association fee. This is similar to an HOA fee, but for the condo building instead of the neighborhood.
In Chicago, the average condo association fee ranges from about $1,200 to $8,000 annually.
The fee paid will help to provide funds to keep up the common areas, landscaping, and building maintenance.
How much is a down payment on a condo in Chicago?
One of the most important things you have to do before you can buy a condo or any home is save for the down payment. Typically, you’ll find 20% of the purchase price is considered normal as a down payment. However, this is not a “set in stone” down payment and many condo buyers don’t put 20% down.
Putting 20% down is more of the ideal situation. It’s not a requirement for a mortgage.
In fact, if you qualify for an FHA (Federal Housing Authority) mortgage, you will only be required to put down 3.5% of the purchase price of the condo. If you qualify for down payment assistance, that percentage will likely go down and you may not have to put anything down at all.
There are benefits to putting 20% down, however. When you put 20% down on a condo in Chicago you’ll have more buying power and a lower mortgage payment. In addition, you’ll pay more money in interest over the course of the loan.
Do condo owners pay property tax in Chicago?
Yes, condo owners pay property taxes in Chicago. The amount of taxes can vary quite a bit from one location to another, even on similarly priced condo units. Typically, property taxes on condos will be lower than property taxes on single-family homes.
Can you remodel a condo?
Yes, in most circumstances, you can remodel your Chicago condo. You will be allowed to update the space just as you would a home. However, there may be some regulations from the Condo Owner’s Association you will have to follow.
When you purchase a condo in Chicago you will be able to remodel it. It’s your home and you can do as you please, as long as you stay within any rules or regulations set by the COA.
What else should I know before buying a condo?
These five questions are a good start and will help you figure out if you’re ready to buy a condo in Chicago. Here are a few more tips and things to consider.
- Hire a Real Estate Agent with Condo Buying and Selling Experience
- Get Pre-Approved before Shopping for a Chicago Condo
- Know what you get with the Condo, such as parking spaces, additional storage, etc.
- Know what your COA Fee will cover
- Understand the Building Rules
With a good Chicago real estate agent on your side, you won’t have to worry when shopping for a condo in Chicago. Your agent will be able to advise you and get you all the information you need to make a smart decision.