Here’s something we don’t see every day. At Gunnison Street Lofts in Uptown, Finnegan Development is listing units for sale or for rent (for example, a three-bedroom two-bath is for sale at $399,000 and for rent at $1,850 per month).
“The market’s slow, so I’m just tapping other resources with rent-to-own,” says developer Jim Finnegan. The rentals can work in several ways. Tenants can simply sign leases the way they would for an ordinary apartment. They can also funnel money they put down up front (instead of a security deposit) and a portion of their rent towards a down payment, he says.
The deal works a little bit differently with each buyer. “We don’t have one form that’s used,” Finnegan says. “We sit down with each client and do it individually.” Two tenants have signed on for the rent-to-own option, he says.
Four units are available in the 25-unit building, 4840 N Broadway St, according to Finnegan.
awesome building.
Nice building and nice reflection of the camerwoman 🙂
When I do the math on a “rent or buy” on $399k vs $1,850 / month the conclusion is: rent. Unless, that is, you expect significant appreciation in the near term.
Joe, where is the anti-own crowd to applaud your statement?
this is a great looking building. The retail on the first floor also has some great looking signage.
I believe that the retail is actually two restaurants/bars. I applaud the developer getting real tenants and not nail salons.
The tenants are Marigold Restaurant (a “modern” Indian fine dining establishment), the Annoyance Theater (a talented improv troupe), and Fat Kat (which is owned by the people who brought you the Silver Cloud in Bucktown back when that neighborhood was really dicey). This building has single-handedly done a LOT to help revitalize Uptown, since three new night spots makes quite an impact where there was once nothing. Add these to Agami Sushi, Crew, Nick’s on Wilson, Uptown Lounge, The Spot, etc., and Uptown is actually starting to have places to go at night!
I’ll applaud Joe’s statement.
If you put 20% down (which most aren’t doing today) your P&I would be just shy of $2000 based on Freddie Mac’s 6.31 30 year rate. A more realistic 10% down would net you a P&I payment of $2650. That doesn’t even take into account your taxes and HOA’s. Now you’re well over $3000 ($3250-$3500 range?). And since you’d only get around $700 back on your interest deduction you’d still be doing better renting.
This rent to own ration is the case all over the Chicago area and is available to anyone who owns a calculator.
Also Borders Book Store (at least for now) and two Jewel/Oscos within easy distance, one north and one south. Plus, the post office is next door (and if you don’t think of this as an automatic convenience, you must not do a lot of package shipping/receiving).
Now, if they would give us a really nice ladies’ hair (and, yes Alan, nail) salon and clothing boutique, the area would really swing!
Z, in your calculations you forgot to take into account the property tax deduction, and the fact that you actually pay down your principal a bit each month (a few hundred dollars at first, but goes up slowly each month). Also, IF there is appreciation (a big IF right now for sure), the leveraged investment can pay off big or lose big–depending on the market. You really can’t compare the finances of ownership vs. renting without taking into account the biggest factor–and that’s appreciation or depreciation. This is really the key.
Oh, there’s also home owner’s insurance and maintenance costs of the property…
The single biggest mistake home buyers make when estimating their after-tax cost of ownership is in computing the value of the interest / tax deductions.
The standard deduction for a married couple filing a joint return is $10,300.
Many taxpayers will have little or no other itemized deductions beyond those related to homeownership.
An honest rent-vs-own calculation only includes interest and taxes to the extent that they exceed the standard deduction minus any other itemized deductions.
Doing this right can make a big difference in the rent vs own result. It’s a factor that many Realtors simply choose to ignore or gloss over.
…you forgot to take into account the property tax deduction…
correct, but if you’re renting you don’t need to worry about property taaxes then do you.
…you actually pay down your principal a bit each month…
which means your interest deduction gets less every year.
…You really can’t compare the finances of ownership vs. renting without taking into account the biggest factor–and that’s appreciation or depreciation….
True, but then again you can niether predict nor control that so trying to factor it in the equation is imnpossible.