Chicago Cap Rate – Heat Map

Hello to all my blog readers out there!

Here is a heat map of Chicago Cap Rates by neighborhood.

Neighborhoods with a darker shade, have higher cap rates.

If a neighborhood has a lighter shade, it means the cap rate is lower in that area.

If a neighborhood has no shade at all, it means there were no multi-family sales for the time period.

This sales data was taken from the Multiple Listing system.

The median cap rate in Chicago is about 6.8%.

I spent a lot of time putting this heat map together,

so I hope you find this information useful.

If you have any questions, please send me a note: mark@markkillion.com

You can also text me at 773-354-6693 or visit me online at: www.buybronzeville.com

Thanks,

Mark Killion, Real Estate Broker

Kale Realty – 2447 N Ashland Ave – Chicago, IL 60614

Cell: 773-354-6693

Office: 312-939-5253

Visit me online today: www.buybronzeville.com

Equal Housing Opportunity

Chicago Multi-Family Income Property

Hello to all my blog readers out there!

I am back with some more great information for you.

I just analyzed the last 2 years of sales information for Chicago multi-family properties.

My main goal was to derive Chicago cap rates by neighborhood.

There is not a lot of good cap rate information out there by neighborhood.

But, I was happy to find that my last post about Chicago cap rates is still ranking high on Google!

What is Cap Rate?

Here is a refresher on the concept of Cap Rates.

According to Investopedia:

“The capitalization rate, often referred to as the “cap rate”,

Capitalization Rate = Net Operating Income / Current Market Value”

Please keep in mind that this is a high level analysis.

It should give you a ballpark idea of cap rates in the various Chicago neighborhoods.

But some assumptions were made for this analysis.

For example, to determine the net income for a property, I assumed it would be 50% of the Gross Rental Income.

Also, I tried to weed out properties that require a significant amount of rehab work.

Typically those properties will sell below market value and they will make the cap rate look deceptively high.

I also tried to weed out properties that were vacant.

In this year’s analysis, I included the number of properties that were sold in that neighborhood for the time period considered. So if only 1 or 2 properties were sold in the 2 year period, I would not be extremely confident in the displayed cap rate.

However, if several properties were sold in the 2 year period, you can have a higher level of confidence in the displayed cap rate.

If you are considering purchasing an investment property in Chicago for $300,000 or more, I would be happy to do a more detailed analysis for you. Of course, this is assuming I would be your buyer’s agent and represent you in the transaction. As much as I enjoy helping others, I have to keep the lights on

Either way, I hope you find this information useful.

Feel free to leave a comment here… or send me a note: mark@markkillion.com

You can also text me at 773-354-6693 or visit me online at: www.buybronzeville.com

Thanks,

Mark Killion, Real Estate Broker

Kale Realty – 2447 N Ashland Ave – Chicago, IL 60614

Cell: 773-354-6693

Equal Housing Opportunity

Chicago Cap Rates by neighborhood

Chicago Cap Rates by neighborhood

Chicago Cap Rates by neighborhood

Chicago Cap Rates by neighborhood

Chicago Cap Rates by neighborhood

Chicago Cap Rates by neighborhood

Chicago Cap Rates by neighborhood

Thanks,

Mark Killion, Real Estate Broker

Kale Realty – 2447 N Ashland Ave – Chicago, IL 60614

Cell: 773-354-6693

Office: 312-939-5253

Visit me online today: www.773property.com

Equal Housing Opportunity

South Shore Chicago – Rent Price Trend

Chicago Multi-Family Income Property

Hello to all my blog readers out there.
I know it has been a while, but I am back with some valuable information!
I analyzed 2 years of sales transactions for Chicago
Multi-Family apartment buildings.
I wanted to find out the average cap rates by neighborhood.
This is one of my most popular reports.

This report is based on MLS data for the period of
01/01/2015 through 12/31/2016.
The MLS system is used to list and sell properties that are brokered
by a licensed real estate agent.
So this analysis does not include properties that were sold “off market”.
But the MLS includes about 90% of all sales transactions.

As a refresher, let’s talk about cap rates right quick.
According to Investopedia, Cap Rate is defined as follows:

“The capitalization rate is the rate of return on a real estate
investment property based on the income that the property is
expected to generate. The capitalization rate is used to estimate
the investor’s potential return on his or her investment.

The capitalization rate of an investment may be calculated by dividing
the investment’s net operating income (NOI) by the current market value
of the property, where NOI is the annual return on the property minus all
operating costs. The formula for calculating the capitalization rate can
be expressed in the following way:

Capitalization Rate = Net Operating Income / Current Market Value”

For more info on cap rates, please visit:
http://www.investopedia.com/terms/c/capitalizationrate.asp

To derive cap rates for my report, I looked at the stated gross income for each property.
I then assumed the expenses would be 50% of the stated gross income.
This is known as the 50% rule.
It gives you a quick way to analyze properties at a high level.
So this analysis assumes that for multi-family properties your expenses
will be about half of your revenue.
On average, this is about right. Once you have your net income, you divide
it by the selling price to get the Cap Rate.
So if a property has a annual net income of $100,000 and it sold for 1 million dollars,
it has a cap rate of 10.
Note: If a property had a stated gross income of $0, it was not included in this analysis.

Generally speaking, neighborhoods with high appreciation rates have lower cap rates.
And neighborhoods with high cap rates will usually have low or flat appreciation rates.
These two metrics are inversely related and I think this report highlights that relationship.

If you are thinking about buying or selling an investment property in Chicago,
please let me know! You can send me a note: mark@markkillion.com

Until the next time,

Mark Killion
Kale Realty
2447 N. Ashland
Chicago, IL 60614

Office: 312-939-5253
Cell: 773-354-6693

Send me a note!

Visit me online: www.773property.com

EQUAL HOUSING OPPORTUNITY

The report is shown below:

Cap Rates, by neighborhood, for Chicago Multi-Family Properties 2017

This analysis is based on data from the MLS.
2016 was another strong year for Chicago rentals.
I analyzed over 18,000 rental transactions!
The report is shown below.

This report shows average rent prices by neighborhood and bedroom count.
The number in parentheses shows the count of units for that cell.
So if you see “$1000 (22)”, it means the average rent was $1,000 and 22 units were rented.

This data is quite interesting.
The average 3 bedroom in the Loop neighborhood is $4,669.
While the average 2 bedroom in the Loop is $2,735.
So if you give up 1 bedroom, you can save almost 2 grand per month.
Another thing to take note of: Loop rents are sky high!

Hopefully you find this information useful.
If you have any questions about real estate, please let me know!

Until the next time,

Mark Killion
Kale Realty
2447 N. Ashland
Chicago, IL 60614

Office: 312-939-5253
Cell: 773-354-6693

Send me a note!

Visit me online: www.773property.com

EQUAL HOUSING OPPORTUNITY

Chicago Average Rent Prices by neighborhood and bedroom count – 2016

Chicago Average Rent Prices by neighborhood and bedroom count – 2016

Chicago Average Rent Prices by neighborhood and bedroom count – 2016

Chicago Average Rent Prices by neighborhood and bedroom count – 2016

World Class Golf Course coming to South Shore Chicago

The news just keeps getting better for the South Shore Chicago neighborhood.
Tiger Woods has agreed to design a golf mecca on the south side of Chicago.
The goal is to have professional televised golf tournaments played there.
That is a lofty goal indeed!

I read that President Obama called Tiger Woods and asked him to design
this new course as a personal favor.
I am sure Mayor Rahm Emanuel made some moves behind the scenes as well.
(For instance, there was no public vote or input on the matter)

Tiger Woods and President Obama discussing the South Shore Golf course.

It sounds like it will extend from Jackson Park near 67th and Stony Island
all the way to the South Shore Cultural Center on 71st Street and South Shore drive.
This is a very beautiful stretch of real estate. It has stunning views
of the Lake to the east and the Chicago skyline to the north.

The total project is expected to cost around $30 Million dollars!
80% of that is expected to come from private investors.
The project will start in mid 2017 and it will take about 3 years to complete.
Combine the new golf course with the new Presidential Library, and I think
we are about to see a chain reaction of commercial investment in South Shore Chicago.

This is really great news for the South side of Chicago and the city in general.
It will definitely have a positive impact on local real estate values.
I think South Shore is a great place for real estate investments.

Several real estate investors have asked me about the South Shore neighborhood recently.
If you are thinking about picking up an investment property or two,
South Shore should definitely be on your radar.

Prices are still reasonable and the long term outlook is great.
If you have any questions about buying South Shore Chicago real estate,
please let me know!

South Shore Real Estate Listings

Until the next time,

Mark Killion
Kale Realty
2447 N. Ashland
Chicago, IL 60614

Office: 312-939-5253
Cell: 773-354-6693

Send me a note!

Visit me online: www.773property.com

EQUAL HOUSING OPPORTUNITY

Average Rents In Bronzeville

Mark Killion – Chicago Investment Properties

Chicago Cap Rates by neighborhood

Chicago Cap Rates by neighborhood

Chicago Cap Rates by neighborhood

I analyzed about 1,000 closed transactions of “2 to 4″ unit properties
in Chicago. These properties were sold during the 6 month period
ending Nov 15th 2015.

This analysis should give you a good idea of current cap rates in various
Chicago neighborhoods. If you have any questions about investment properties
in Chicago, please Send me a note!

Mark Killion
Kale Realty
Chicago, IL