ChicagoDowntown / Loop

Rent vs own calculation favors owning at 235 Van Buren

by sponsored post on 7/10/13

Steep (and rising) rents in downtown Chicago high-rises are prompting many renters to re-examine the question of whether they’d be better off buying a condo. That question is taking on more urgency as the inventory of unsold new downtown condos has fallen by more than 90% since 2008 to levels not seen in the last fifteen years.

The award-winning Ralph Johnson-designed 235 Van Buren has consistently been one of the top-selling downtown condos in recent quarters. A limited number of units in the building have been rented, making it possible to establish a fair-market rent for units and a valid rent vs own comparison.

The south-facing 2-bedroom, 2-bath Unit 3107 is listed for sale at $323,900 and would rent for $2,250 a month. Financing is currently available at a 4.626% APR with a 10% down payment. The monthly assessment on the unit is $358 and real estate taxes are estimated at $405 a month.

The result is a total monthly payment of $2,262, almost identical to the cost of renting – before taking into account the income tax benefits of ownership. Tax savings are estimated at $571 a month, based on a 30% tax rate, reducing the actual cost of ownership to $1,691 a month.

The bottom line on these assumptions: owning the unit costs $559 a month less than renting it, and the total annual savings from ownership is $6,708. The 5-year advantage is $33,540.

Over a 5-year period an owner would have reduced the principal balance on the mortgage by approximately $25,000, another form of savings.

Individual benefits, of course, can vary, but the stated assumptions are fairly conservative.

Owners also gain what many consider the prime advantage of ownership: the ability to individualize their unit in a way that a renter never can, and make it truly their home.

At 235 Van Buren’s video page you can meet more of the owners, see how some of them have customized their homes, and learn about their reasons for buying in the community.

Share:
  • Facebook
  • Google Buzz
  • Digg
  • LinkedIn
  • StumbleUpon
  • del.icio.us
  • Google Bookmarks
  • Live
  • Posterous
  • Reddit
  • Technorati
  • Tumblr
  • email

Related posts:

  1. 235 Van Buren – welcome to a show that never ends
  2. A 235 Van Buren commute, via water taxi to Michigan Ave
  3. McClurg Court joins the month’s free rent movement

Leave a Comment

Previous Post:

Next Post: