Renting versus Buying in Chicago

Mar 6

It’s the age old discussion, should I rent or should I buy? As we all know, rates have not been great but inventory has also been low which has pushed some potential buyers back into the rental market which increased demand thus increasing rent prices. With these factors, it’s important to dig deep into the numbers, your financial situation, and long term plans to ultimately decide if renting or buying is right for you.

Here are some key factors to consider when deciding between buying vs. renting:

Buying a Home

✅ Building Equity – Your monthly mortgage payments contribute to ownership rather than a landlord’s income.
✅ Stability & Predictability – Fixed-rate mortgages keep payments consistent, unlike rent, which can increase.
✅ Tax Benefits – Mortgage interest and property taxes may be tax-deductible.
✅ Customization & Control – You can renovate, paint, and modify the home as you wish.
❌ Upfront Costs – Down payment, closing costs, and maintenance expenses add up.
❌ Long-Term Commitment – Harder to move quickly due to selling process and market conditions.
❌ Market Risks – Home values can fluctuate, affecting resale profits.

Renting a Home

✅ Lower Upfront Costs – Security deposit and first month’s rent are cheaper than a down payment.
✅ Flexibility – Easier to move for work or lifestyle changes.
✅ No Maintenance Hassles – The landlord handles repairs and upkeep.
✅ No Market Risk – You’re not affected by home value fluctuations.
❌ No Equity Building – Monthly payments go to the landlord, not toward ownership.
❌ Rent Increases – Your rent can rise annually, unlike a fixed mortgage.
❌ Limited Control – No renovations or major changes without approval.

When to Buy vs. Rent?

💰 BUY if you plan to stay long-term (5+ years), want to build equity, and can afford the upfront costs.
🚀 RENT if you need flexibility, don’t want maintenance responsibilities, or aren’t ready for a long-term commitment.

Here are some local examples of monthly rent vs monthly mortgage payments in Chicago!

East Lakeview - 3950 N Lakeshore - 2 beds, 1 bath - Avg List Price - $210,000

Average Monthly Rent - $2,100 - $2,400
Monthly Mortgage with 10% down payment at 6.75% - $2,525
Monthly Mortgage with 20% down payment at 6.75% - $2,295

*in this example, the rent is very close to the monthly mortgage payment which includes a relatively high HOA averaging $700/month

Lincoln Square - 2531 W Berwyn - 2 beds, 2 bath - Avg List Price - $210,000

Average Monthly Rent - $2,000 - $2,400
Monthly Mortgage with 10% down payment at 6.75% - $2,063
Monthly Mortgage with 20% down payment at 6.75% - $1,833

*in this example, the low HOAs and low taxes make a compelling argument to purchase if you have the down payment saved. The building is older though so it’s important to factor in future upkeep in the budget

Logan Square - 2911 N Western- 2 beds, 2 bath - Avg List Price - $400,000