Chicago is a vibrant and diverse city spread across a 25×15 mile city with over 200 unique neighborhoods. Because our amazing city is so large the decisions and factors on whether to rent or buy in Chicago can be a bit complex. There are benefits and drawbacks to each path, with the majority of decision-making coming down to your lifestyle, financial situations, and long-term family planning goals. In this blog, we will explore the pros and cons of renting versus buying in Chicago and help you make the best choice no matter what part of the city you’re looking to live in.
Pros & Cons of Renting in Chicago
Pros of Renting in Chicago
- Lower Upfront Costs
- Renting a home in Chicago requires less upfront costs compared to buying. These costs are generally much lower than the down payment, closing costs, and other expenses when buying a home.
- Renting provides you with more flexibility in terms of your living situation. If you’re unsure of your future plans or want to explore different areas of the city then renting is a great choice.
- No Maintenance or Repair Costs
- When you rent a home in Chicago, you are not responsible for any maintenance or repair costs. If something goes wrong with the property, such as a water leak or a broken furnace, the landlord is responsible for fixing it.
Cons of Renting in Chicago
- Limited Control
- Renting a home in Chicago means that you have limited control over the property. Usually, you will not be able to make changes to the home, such as painting the walls or installing new fixtures, without the landlord’s permission.
- Rent Increases
- Rent prices in Chicago can be volatile, and landlords may raise the rent when your lease is up for renewal. This can make it difficult to budget and plan for future expenses, especially if you are on a fixed or lower-income budget.
- No Equity
- When you rent a home, you are essentially paying for someone else’s investment. You do not build any equity in the property and do not see any financial return on your investment.
Pros & Cons of Buying in Chicago
Pros of Buying in Chicago
- Building Equity
- One of the biggest advantages of buying a home in Chicago is that you build equity in the property. As you pay down your mortgage, you own more and more of the home, which can provide you with a sense of financial security and stability. This can also provide future stability for the next generations of your family leading to generational wealth.
- Tax Benefits
- Unlike renters, homeowners in Chicago can take advantage of tax benefits such as mortgage interest deductions and property tax deductions. These deductions can help lower your overall tax bill and make homeownership more affordable. These may change year-to-year but will always put you in a better position with your taxes than renting would.
- Freedom and Control
- When you have no landlord, have true freedom in your home. Owning a home in Chicago allows you to have the freedom and control to make changes to the property as you see fit. You can paint the walls, remodel the kitchen, gut the bathroom, or even add a swimming pool if you want to. Additionally, you can stay in the home for as long as you like, without worrying about a landlord deciding not to renew your lease.
Cons of Buying in Chicago
- Upfront Costs
- Buying a home in Chicago requires a significant upfront cost, including a down payment, closing costs, and other expenses. This can make it difficult for some buyers to afford homeownership. But unlike renting there are a variety of resources for buyers to find, apply for, and receive financial assistance to make owning a home a reachable goal.
- Maintenance and Repair Costs
- When you own a home, you are responsible for all maintenance and repair costs. This includes things such as roof repairs, plumbing issues, appliance malfunctioning, and other expensive repairs that can add up quickly. This can be avoided by hiring a reputable home inspector that doesn’t skip any steps so you can have any potential problem areas addressed before you move in.
Hopefully, this short guide can help you better understand the pros and cons of renting vs buying in Chicago and make a more informed decision on your living situation moving forward. As a full-service real estate brokerage in Chicago, Pearson Realty Group has brokers that can help you rent or buy in every area of the city. Take a look at our Agent Roster or contact us today to get started on your new home journey!