Chicago as an investment location

Just wondering what peoples thoughts on Chicago as an property investment location are? I'm interested, obviously due to the favourable exchange rate at the moment, but also due to the fact that Chicago is the front runner for hosting the Olympic games in 2016, due to be awarded in 2009.

Are you interested in the apartment complex that was advertised over the week-end? This caught my eye also. What's the website address? It's some Irish guy building a large complex.

Why buy into a falling US market?

Unless Chicago is bucking the trend its not the country to invest in.

Calico said:

but also due to the fact that Chicago is the front runner for hosting the Olympic games in 2016, due to be awarded in 2009.

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Be very very careful about statements like this. Every major city where property is being sold to foreign investors has had this line attached to it at some stage.
its an aul favourite of the estate agents.

Every country/major city considers bidding for every Olympics. Paris had it already in the bag until the announcement came and London had stole the show. Even London was amazed

search google for ANY major city foloowed by 'olympics', and you see artilces on the potential/upcoming bid.

Budapest - 2012
Prague - 2020
Warsaw - 2012
San Francisco - 2016
Paris - 2012 (remember it was a shoo-in)
Moscow - 2012
Madrid - 2012
NYC - 2012
..
..
..

Oh, I know there is no guarantee about Chicago getting the games but it IS the strong favourite. It's Asia in 2008, Europe 2012 so to my mind that increases the liklihood of Chicago (only US bid) in 2016. Rio is the threat but they are getting the World Cup in 2014. Having said that, the underdog has tended to win the games over the frontrunner.

If I had a visa I would take a chance and happily live there for a couple of years. It woudln't be so risky then. Falling market or not, the euro may soon be $1.50 so that makes US property very attractive. Also, US demographics suggests a steep increase in population over the coming years...

A couple of links with details of price and rental trends in Chicago.

Calico (Chicago winner of the USA bid for 2016)

There is only one means to play the market with surity. But wait until the full list is formally announced by the IOC in 2009. Presently the transport network is the only problem with Chicago - Madrid and Tokyo are way ahead on these scores. But major infrastructure projects are now underway.

As mentioned at the time of the formal bid, Chicago is expected to be the clear favourite as Paris had been before. The property market and dollar should have well and truly bottomed, so invest in any Chicago zipcodes set to gain from the bid. At the same time through a city spread bettor or bet exchange take out a $10,000 bet that their bid fails, hopefully at odds of 10/1 to 15/1 [tax free win]. That way you can hedge for both outcomes and make money eitherway.

Would Chicago not be a very expensive place to buy, even in a dropping US market? It would appear that there is still a heavy premium on US city centre property. I found a couple of articles referring to Chicago on the editorial section of [broken link removed], interesting but still wouldn't entice me to invest there. Garrett Kelleher's spire would appear to be somewhat of a misadventure in current market conditions. It seems investors are looking for capital gain rather than rental returns even though capital gain prospects would appear to be dim at best in the States at the minute, or am I missing something here? The entry level (and consequently deposit) would also appear to be very high.

Having lived in Chicago recently, the cost of accomodation is significantly lower per square meter than in Dublin -- sometimes upwards of 60% cheaper. The quality is also far superior in terms of level of ammenity and level of finishes. I am not sure how the numbers stack up for renting/investment but comparing living standards and quality of space/construction there is no comparison.

dfg75 said:

Having lived in Chicago recently, the cost of accomodation is significantly lower per square meter than in Dublin -- sometimes upwards of 60% cheaper. The quality is also far superior in terms of level of ammenity and level of finishes. I am not sure how the numbers stack up for renting/investment but comparing living standards and quality of space/construction there is no comparison.

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What was your arrangement there? Do you have an American passport/greencard? I would love to spend a couple of years there but not illegally & not contracted to an employer....

I bought into Chicago last year and showed an interest in this companies last two launches, passing more than serious, having said that both were sold out before I got to them, seems a lot of people are buying the story and liking the dollar, it is one hell of a City to visit !

Palerider said:

I bought into Chicago last year and showed an interest in this companies last two launches, passing more than serious, having said that both were sold out before I got to them, seems a lot of people are buying the story and liking the dollar, it is one hell of a City to visit !

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What do you mean by liking the dollar? It is falling in value significantly against the euro, hence anyone holding property there is seeing it fall in value.

Dollar/Euro touched 1.44 last week, this is an historic dollar weakness against euro, suggestions coming forward from some quarters that Europe and United States need to start thinking about a trade embargo on China, China as you may know is artificially supporting its currency ( source - heard an University economist on Morning Ireland radio show last Friday week ), whilst a spec purchase at historically low rates there would appear to be a punt opportunity on property in the States and on the currency, particularily pre-construction, I'm after a knock down 2 bed/ 2 bath apartment, pre-construction adjacant to Orlando at $150000 right now and am prepared to sit out the Floridian slump with my construction costs locked in under contract.

Just my view, each to their own and all...

Palerider,

Why oh why Orlando? It's a swamp and likely to revert to its former status. America is a big country with lots of other options. Why do the Irish have a fixation for the place. It is the European equivalent of Malaga. No one in their right mind should touch it with a barge pole.

However, am I right in thinking that Chicago became the clear winner from the States nominations. Did it not recently beat San Franciso, that was seen by many as the clear favourite. If property where to fall here and the dollar go to $1.50 against the euro, it could be a good buying opportunity.

Any other thoughts on Chicago? We're fairly frequently visitors, there at least once a year. OH thinks it's a smarter investment than a buy to let here and wants to go on a property viewing trip in January.

I'm not quite so sure it's a smart move?

The indo article today said it was selected as the US nomination for 2016. Personally I think this is rubbish AFAIK cities bid for the Olympics not countries, unless the rules have changed, so in theory 10 American cities can bid for it.

I have one property in Chicago, its a great City and is bucking the trends, particularily in the rental market with rents up almost 2% during last quarter ( source - Crains journal ), buying on hope for Olympics isn't a good enough reason to buy, decision is due late 2009, whilst property may have slowed there is still strong demand, main out of country investors are from South America and China according to the locals, also domestically popular with suburban Chicago dwellers and Calafornian buyers.

Do the inspection trip, be very careful though as like any market there are areas to avoid, concentrate on Loop, West Loop or something with lake views, do go see the place, its well worthwhile, gather information in advance to make the trip worthwhile, if nothing else you will love it as a City break..

I feel that for overseas investors the true investment is not in new highly marketed projects, however more toward the rehabilitation of Bank owned property that you can buy for at little as 50 cents on the dollar. Real Estate in Chicago is interesting because there is often 3 rental units in one building. Market rentals here are nearing 1300/month which presents a hugh investment opportunity to cash flow.

Typically rehabilitation cost range are no more than 35,000 on a building w 3 rental units that would cost you 150,000. again, the market price for this home is 350,000 so not only is there an opportunity to cash flow monthly but above and beyond have 100,000 in equity.

Think about finding a investment like this one in a community that is within 5 minutes of the proposed 1.1 billion dollar Olympic Village site for the 2016 Summer Olympics!!!! The appreciation is amazing.

So to answer is chicago a great location for investment, I'd say yes, depending on where you invest and what type of investment. Mulit unit buildings in a neighborhood that will be impacted by the 2016 Olympics is the way to go. Get in now why you have the leverage of the weakend dollar and discounted bank owned property.

Chicago is the only US city that will bid for the 2016 Olympics.

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