Category Archives: Featured

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Dear Piggy: Help! My new apartment isn’t ready!

pig writing

I was recently contacted by a renter who had lined up an apartment for March 5, or so he thought. On March 1, his new landlord contacted him with a sad confession: they had misinterpreted when the outbound tenant was leaving. His new apartment would not be ready until April 1. He wanted to know his options. This is a situation that occurs more often than you’d think in Chicago. It may not be a 27 day gap like this poor fellow encountered, but a whole lot of renters face at least an overnight gap between when they have to be out of one place and when they can get access to the next.

Not every delay is caused by clerical errors, like the one faced by the poor fellow above. You probably want your new apartment to be clean and fresh for you when you move in. Doing so takes a lot of work, and few large-scale landlords have enough staff members to get every apartment turned over in less than 24 hours as it is. If you want your apartment to be in good shape, you really do need to allow enough time for turnover in between tenants.

Some tenants get unreasonably angry about such delays… and then unreasonably angry all over again when their new apartment isn’t spotless. They wouldn’t fault a fancy restaurant for a little delay while the staff turns over the tables. They generally accept a hotel’s check-in and check-out times if it means that the bedsheets get changed. But when it comes to apartments? The minute a landlord is tardy with the keys, tenants are off to rant about it on Yelp.

Regardless of how you react to the situation emotionally, though, there are five basic routes you can take from a practical standpoint to resolve the issue. If you’re facing a similar situation, here they are, roughly sorted from worst to best.

Break the Lease and Find Another Apartment. (more…)

Buying in 2013? Here’s what to expect.

I don’t really spend much time talking about the home buying market. There’s plenty of folks who write well about that side of the business. I feel that renters and landlords are somewhat under-served, so I focus on them. However, the changes occurring in the Chicago residential market are going to affect everyone this year. It’s time that we have a little talk about what to expect if you are moving from renting to buying.

You’ve probably heard a lot over the past several years about the depressed housing market. If you’re renting, you may have thought you still had some time to take advantage of the lowest home prices and mortgage rates seen in decades. Guys, you’re running out of time. Prices are climbing, inventory is short, and rates are starting to move up again. While the prices aren’t likely to spike back up to 2006 levels any time soon, the bottom of the market has passed you by. (more…)

Dear Piggy: Does anybody shovel around here?

So did any of you have this running through your head last week? I know I did.

Yes indeed, I’m a child of the 90’s and we had snow last week here in Chicago. Quite a bit of it. And it prompted one of my regular readers to send in a question:

Dear Piggy,

How about an entry on how you can be fined if you don’t clear snow from your sidewalks, including tenantsĀ (and that you can call 311 if people AREN’T clearing)?

So that means we’re talking about shoveling today.

Who owns the sidewalk? (more…)

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Cook Eviction Stats Part 9: The Cost of Doing Business

Evictions in Cook County are a multimillion dollar industry. With close to 40,000 cases happening each year, the amount of time and energy devoted to people who don’t pay their rent is mind-bogglingly vast. In fact, today I want to take some time to discuss what the eviction industry is costing Chicago in terms of lost time and money. And tenants, if you think this doesn’t pertain to you, it does. Remember that the resources that a landlord puts into evictions could otherwise be spent purchasing and rehabilitating the apartment buildings that are currently sitting empty and inaccessible.

Long time readers will know what this means. I’m going to do math for you. Again.

Yay math time!

Yay math time!

(more…)

Rent Bacon, January 2013 – New Format!

New. Improved. Actually Useful.

Rent Bacon, January 2013: 1 bed/1 bath rentals Chicago

The Rent Bacon index number is an indicator of how a district is performing compared to the HUD Fair Market Rents. Landlords can use it to figure out how much more to charge this year. Tenants can figure out how much more it will cost to move.

Welcome to the new Rent Bacon. As I explained last month, I’ve redesigned the Rent Bacon concept to be more comprehensive and more recent. I’ve spent quite some time over the past month thinking about the goals for this monthly series and I’ve got some really exciting results for you.

First of all, we will be rotating monthly through 1 bed/1 bath apartments, 2 bed/2 bath apartments, and 3 bed/2 bath apartments so that we hit all three of the most popular apartment sizes at least once a quarter.

Secondly, we will be looking at 3 month averages instead of one month averages in order to get a decent sample size in each of our zones.

Thirdly, and this is most exciting, the index is actually useful. The new Rent Bacon Index is a rough estimate for how much more the same apartment is worth this year over last year. This means that if you’re a landlord, you can use it to figure out how much to increase rents this year. If you’re a tenant, you can figure out how much more or less you can expect to pay to move to the same size apartment in the same area.

About The Graphic (more…)

Cook County Evictions Revisit Part 1: Intro

Returning to the Scene of the Crime

In May of 2012 I did a three part series that tried to debunk the urban legend that Chicago’s government entities are biased against landlords. I investigated the CRLTO and found it to be weighted heavily in favor of the tenant. I also investigated eviction proceedings using the Cook County Clerk’s website. Based on the information I used, I came to the conclusion that the courts were also biased in favor of the tenant. However, I didn’t feel too confident with those results.

I'm not doing so well in disproving the rumor that I count beans as a hobby, am I?

I’m not doing so well in disproving the rumor that I count beans as a hobby, am I?

(more…)

Three Little Pigs Get a Windfall (Or, Mortgage Discount Points FTW)

Once upon a time there were three little pigs. (I’m surprised I haven’t done this in the past year.) The pigs have a grand adventure in store for them involving building supplies and poached wolf, but for today we’re starting at the beginning of their story, and that means it’s math time.

Yay math time!

Yay math time!

They were each sent out into the world to make their fortunes. When it came time to buy housing, their mother gave each of them a surprise gift of $5000 in addition to the money they’d already saved.

Now, let’s say that they’d each saved up the same amount of cash, had similar credit scores, and all bought $300k townhouses in the same development using FHA loans with 3.5% down. (I know that isn’t how the story goes, but I’m not talking about construction materials today.) However, each one chooses to do something different with their $5000 gift from their mother.

Pig #1: $5000 on new appliances.

The youngest pig spent the extra $5000 on new appliances for his kitchen. He got a new Fridge ($1300), a new stove ($1300), and a new washer and dryer ($1200 each). Ten years later when he sells the property he’ll have spent $154837 in debt service on his mortgage. His appliances would be close to the end of their useful lifespans, so they won’t contribute much to the value of his home. In fact, he might have to replace them all again in order to sell the property.

Maybe he got something awesome like this modular stacking refrigerator.

Maybe he got something awesome like this modular stacking refrigerator.

Pig #2: $5000 towards the down payment.

The middle pig was quite content with the appliances that the developer provided, so he chose to add $5000 to his down payment. This lowered the amount that he had to borrow from the bank. When he sells his property ten years later, he’ll have paid $152163 in debt service. This means he’ll have saved $2674 over his younger brother. He’ll still have to replace the appliances before he moves out, but he’ll at least have saved a nice bit towards the cost.

I should note here that given the same 3.44% interest rates on their loans (which happens to be the current national average), it doesn’t matter what the down payment was nor what the cost of the property was. Over 10 years, the savings will always be $2674 if you add $5000 to the down payment.

Ok, so it's a pug, not a pig. Still, if you saved $2674 you'd be saying "neener neener" to your brother too.

Ok, so it’s a pug, not a pig. Still, if you saved $2674 you’d be saying “neener neener” to your brother too.

Pig #3: $5000 towards 1.5 Discount points.

We’ve talked about mortgage discount points before. Basically, for a fee equal to 1% (one “point”) of your loan paid up front, your interest rate lowers by a specific amount, usually 0.25%.

The eldest pig used the $5000 to purchase 1.5 discount points on his mortgage, lowering his rate by 0.375%. His brothers got loans at 3.44%, but he came in at a cushy 3.065%. Over the next ten years he will spend $147686 on his loan, saving $7151 compared to his youngest brother. This means he’ll actually make a profit on his mother’s gift! (Thanks, Mom.) He’ll also have accrued $3055 more in equity on his townhome than his younger brother, meaning he can replace the appliances and still walk away with a nice $5000 in savings.

Needless to say, the eldest pig made the smart move here.

You bet it feels good, little piggy.

You bet it feels good, little piggy.

The moral of the story is that cash at closing can be spent in many different ways, and that bulking up your down payment is not always the best way to go. First time buyers rarely think about mortgage discount points. In fact, residential buyers often don’t consider points at all, unless they are required to pay them in order to get a loan in the first place. However, if you have the cash to spare and today’s already ridiculously low rates aren’t good enough for you, spending some extra dough to push the rate down even further can have a very good effect on your bottom line. Of course, your mileage may vary and you should always run the numbers yourself after a hearty conversation with your lender.

We also learn that an extra $5000 can go a very long way. When saving cash to purchase a home, every bit helps.

See you Monday.

Rental Site Review: SearchChicago.com

There’s a ton of sites you can use to look for apartments in Chicago. Not all of them are fabulous. Most have a mash-up of private landlords, locator services, realtor listings and fake/scam rental listings. The inimitable Joe Zekas of YoChicago is taking on some of the more problematic listings in his own way this year through his Craigslist Apartment Cleanup effort, which I applaud even though it may make my job tougher if any of my legit exclusive listings accidentally get caught up in his dragnet.

However, I thought it would be worthwhile to go through some of the sites that I’ve experienced to let you know how they stack up. I’ll be rating each site I review based on the diversity of listings, the legitimacy of those listings, ease of use, and the freshness of the listings, since the apartment market moves pretty fast. A site can score up to 40 points. Today we’ll be starting with SearchChicago.com, the online classifieds section of the Chicago Sun-Times.

SearchChicago.com logo property of Sun-Times Media.

SearchChicago.com logo property of Sun-Times Media.

SearchChicago Scored 14 out of 40 points. Find out Why. (more…)

Anatomy of a Showing: Is Same-Day OK?

The matter of booking showings with very short notice has come up several times with my clients lately, so I thought I should address it for everyone. With the recent holidays the time required for booking a showing has been longer than normal, but even in normal circumstances there is a fine balance required to get you in to view a home or apartment.

Requesting a showing with very short notice is like springing a pop quiz on the current residents.

Requesting a showing with very short notice is like springing a pop quiz on the current residents.

The Process of Booking a Showing (more…)

Resolutions for Chicago Real Estate

So it’s 2013. Funny how that happened. World didn’t end, although for some of us we were wishing it might have done after the New Year’s Eve parties. I’m sure some of you already have resolutions that found you duking it out over a treadmill this morning. A few more never hurt, though. Here’s a few that you might want to consider if you’re thinking of moving or buying property this year.

For Renters:

Try communication before confrontation. It doesn’t matter if you talk with your landlord directly or with the office staff of a big property management corporation. It doesn’t matter how badly things escalated last year over assorted issues with your apartment. This is a new year and time to start over. If you’ve had big problems, schedule a time to sit down calmly with a decision-maker for the property and review how both sides can resolve problems in an efficient and effective way. Don’t go for the big guns like lawyers and unions until you’ve tried to talk it out first.

Seriously? Always around?

Seriously? Always around is the nicest thing on the list?

Likewise, make a point of warning your landlord if you know there are problems on the horizon. Whether it’s money problems or crowds of house guests, it’s better to notify ahead of time and work out a game plan than it is to sneak around and hope they don’t notice.

Remember, moving is more expensive than you think. (more…)

Lingua Franca: Thinking About the Language of Apartment Leases

Do you remember the first time you read Shakespeare in school? For me it was in seventh grade. I’d heard a lot of hype about him up until that point, but nobody had warned me about the strange, antique form of English he used and how difficult it was to understand. I hacked through it, but for a kid who was used to whipping through a couple of novels a day it was a pretty chastening experience. To paraphrase “Star Trek,” it was English, but not as I knew it.

So here’s an interesting bit of trivia. If you threaten to sue someone in the process of working on a Wikipedia article, you’ll lose your editing privileges. The reasoning behind it stems from the “chilling effect” that legal threats have on other writers. Most folks are pretty scared of getting dragged into a courtroom, even if it’s just as a witness. It’s time consuming and the threat of going to jail or racking up massive fines is always present. TV shows like “Law and Order” have contributed to this idea that court is definitely a place to avoid.

(more…)