Are you holding on to a property in Chicago and you aren’t exactly sure why? Every day that you continue to own the property, you are spending money on it. Before you hold on to it for another day, consider the below points. It might be time to think about selling your Chicago home! How much does holding a property cost in Chicago? Keep reading to find out!
If you have ever watched one of the house-flipping shows you’ll notice that there is always an emphasis on finishing the project fast. In almost every episode you will see the flipper pushing the crews to finish the project ASAP. Experienced house flippers intensely manage their holding timeline because they understand how costly it is to hold a property every month.
If you are holding on to the property for sentimental reasons or because you “might” use it one day, you are only throwing your money away. The property you own should be working for you NOW. It can be your primary residence, providing a monthly income, or be used for recreational purposes. If your Chicago house isn’t doing one these things, it might be time you consider selling it!
Costs of Holding A Property In Chicago
Property Taxes
IL property taxes are some of the highest in the entire and you can certainly expect them to continue to increase every year as well. Make sure you remember to pay the taxes on time or will have to pay steep late fees. Every day you hold the property you will be responsible for paying the property taxes and the only way to eliminate your property tax expense is to sell the property.
Utilities
Monthly utilities add up quickly. If you were to add up the amount you’ve spent on electricity, water, gas, tv, and internet you might be surprised at how high that number is. Even if you aren’t residing in the home while selling it, you will still need to keep the lights and the water on for the people who come to see your house. If your house is older and less energy efficient, you are likely to have utility bills significantly higher than what you would find in a new home.
Maintenance & Repairs
A good rule of thumb for maintenance costs is the one percent rule. This rule states that you should plan to spend about one percent of your purchase price on maintenance each year. For example, if your house was purchased for $250,000, you should plan to spend about $2,500 on home maintenance each year. Of course, these numbers can vary widely, but many investors use this formula to estimate costs.
Homeowners Insurance
The insurance premium you pay will depend on several factors specific to your property and situation. If you aren’t living in the property then be sure to notify your insurance company that the property is vacant so that you will be protected with the appropriate policy. Insurance policies for vacant properties are significantly higher than occupied property so be sure to budget accordingly for this.
Mortgage Payments
It can be difficult to come up with a mortgage payment each and every month for a property you don’t want to own. The average mortgage payment nationwide is well over $1000 each month. Some people are struggling to pay thousands of dollars each month when in reality they would be much better off selling the property.
Opportunity Costs
What else could you be doing with the money you have tied up in the house? You could very well be missing out on a better home or investment opportunity. Look around at what else is out there and decide if you are truly happy with your current situation. If your property isn’t doing anything for you, it might be time to find something new!
As you can see, selling your home now as opposed to later can help you keep more money in your pocket. For every day you continue to own it, you will also continue having to be financially responsible for it. The bills and maintenance costs add up quickly. Run the numbers for yourself and make the decision that makes the most sense for you!