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Thinking of buying in Des Plaines, Illinois? Get our financial spreadsheet tailored to the city.
Is it a good idea to buy and rent out in Des Plaines, Illinois?
Well, it depends!
If you're familiar with Des Plaines' zoning laws, understand the demand driven by its proximity to O'Hare International Airport and major highways, invest in neighborhoods like Cumberland or the downtown area, and consider properties near the Des Plaines River for their scenic value, then you'll likely make a fantastic investment.
But if you overlook the importance of a neighborhood's reputation, especially in areas like the Five Corners or the industrial zones, skip out on necessary flood-proofing and regular maintenance, and don't account for the costs associated with maintaining older properties and adhering to local building codes, then your investment might not turn out so great.
Let's dive into more details in the article below.
Thinking of buying in Des Plaines, Illinois?
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Is it a good time to invest in property in Des Plaines, Illinois in 2024?
The current housing market in Des Plaines, Illinois, presents a unique set of opportunities and challenges.
While prices have seen a steady increase, they remain more affordable compared to nearby Chicago. The pandemic initially caused some fluctuations in property values and rental rates, but the market is showing signs of recovery.
Des Plaines is attracting a diverse range of residents, including young professionals and families, which is driving rental demand. There's a moderate inventory available, giving buyers some negotiating power, but competition is still present, especially for well-located properties.
It is a great time to buy and rent out property in Des Plaines’ housing market if you have solid financial backing. If you can make a substantial down payment, have excellent credit, and secure favorable mortgage interest rates, you're in a strong position.
This city offers a promising long-term investment opportunity. Des Plaines benefits from its proximity to Chicago, a strong local economy, and a growing demand for housing. Focus on neighborhoods with high rental demand and low vacancy rates. Additionally, if you have experience in property management or a solid financial plan for your property investment in Des Plaines, you'll be well-equipped to navigate the rental market here effectively.
On the flip side, it's a bad time to buy and rent out property if you're looking for quick profits.
If you're not financially secure and are banking on a market surge that may not materialize soon, you could be setting yourself up for disappointment. Des Plaines' market, while less cutthroat than Chicago's, still requires significant financial resources to avoid becoming over-leveraged.
Moreover, if you're not prepared for the responsibilities of property management, including tenant laws and maintenance costs, you might find the investment more challenging than anticipated.
Here is a little summary table to help you.
| Aspect | Now is a good time to buy and rent out if you ... | Now is a bad time to buy and rent out if you ... |
|---|---|---|
| Financial Position | Have a substantial down payment (at least 20%) and excellent credit to secure favorable mortgage terms in Des Plaines. | Lack significant savings for a down payment and have average or poor credit, making it difficult to obtain affordable financing. |
| Mortgage Rates | Can lock in a mortgage with a low-interest rate, maximizing your investment returns in Des Plaines. | Are facing high-interest rates that could strain your finances, especially with the current property prices in Des Plaines. |
| Investment Horizon | Are looking for a long-term investment (10+ years) to benefit from steady appreciation and rental income in Des Plaines. | Are seeking short-term profits or quick appreciation, which can be risky in a suburban market like Des Plaines. |
| Neighborhood Knowledge | Have deep knowledge of specific neighborhoods like Downtown Des Plaines, Cumberland, and the areas near O'Hare Airport with high rental demand. | Are unfamiliar with the local market dynamics and neighborhood variations, risking poor investment choices. |
| Property Management | Have experience in property management or a solid plan to handle it, including hiring professionals familiar with Des Plaines' market. | Lack property management experience and do not plan to hire a professional manager, leading to potential operational issues. |
| Rental Market Dynamics | Can identify properties in areas with growing rental demand, such as near the Metra stations or major employers like Rivers Casino and Advocate Lutheran General Hospital. | Are unsure about current and future rental demand in specific Des Plaines neighborhoods, risking vacancies. |
| Tenant Laws | Are knowledgeable about Illinois' tenant protection laws and local regulations in Des Plaines, and are prepared to comply. | Are unprepared for the complexities and regulations of tenant protection laws in Illinois, leading to legal challenges. |
| Maintenance and Costs | Have budgeted for maintenance costs, property taxes, and potential updates or repairs unique to older properties in Des Plaines. | Are not prepared for the maintenance costs, property taxes, and additional expenses that come with property ownership in Des Plaines. |
| Economic Stability | Have a stable income and financial cushion to manage vacancies and unexpected expenses in a suburban market like Des Plaines. | Have an unstable income and lack financial reserves to cover potential vacancies or emergencies, which are common in rental markets. |
| Market Leverage | Can negotiate favorable terms due to current inventory levels providing some buyer leverage in Des Plaines' market. | Struggle with negotiations and are likely to overpay due to lack of market leverage and knowledge in Des Plaines. |
| Risk Tolerance | Have a high tolerance for market fluctuations and potential downturns, understanding the suburban market's economic cycles. | Have a low risk tolerance and cannot afford significant market value declines, which can occur in suburban markets like Des Plaines. |
| Proximity to Chicago | Are positioned to benefit from the proximity to Chicago, attracting renters who work in the city but prefer suburban living. | Are overly reliant on the stability of Chicago's job market, ignoring potential economic shifts that could impact rental demand in Des Plaines. |
| Long-term Planning | Have a clear long-term strategy for property management and potential property appreciation, particularly in high-growth areas of Des Plaines. | Lack a clear, long-term strategy and are not prepared for the commitment involved, risking poor returns in Des Plaines' market. |
How much cash flow can you generate in Des Plaines?
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What makes a really good property investment in Des Plaines?
Here is the code to crack to make a fantastic property investment in Des Plaines, Illinois.
First and foremost, focus on the professionals working in the nearby O'Hare International Airport and the surrounding business districts. These areas are the economic backbone of Des Plaines. Properties close to major employment hubs like the O'Hare area, downtown Des Plaines, and the Cumberland Business District will always have demand.
Look for areas that are walkable, have good public transportation, and proximity to major employers. The Metra train line is a significant asset, providing easy access to Chicago and other suburbs, making properties near Metra stations particularly attractive.
Des Plaines has a mix of older and newer housing stock, and understanding the local zoning laws can be crucial. Some areas have restrictions that can limit your ability to make changes or increase rents, but these same restrictions can also ensure a steady tenant base. Buying a property that's already under local zoning restrictions means you have predictable income, but it can limit your revenue growth. If you buy a new property, you're not subject to these restrictions, giving you more flexibility to adjust rents based on market conditions.
Focus on multi-family units. Single-family homes might seem appealing, but multi-family properties spread the risk. Even if one unit is vacant, the others still generate income. Plus, multi-family units often have a better return on investment in a city with such high demand for housing.
Neighborhoods in Des Plaines like the downtown area, the neighborhoods around Lake Opeka, and the areas near the Des Plaines River are hot. They combine cultural appeal with good transportation links.
They're also seeing lots of redevelopment, meaning property values are likely to rise. Avoid areas prone to flooding unless the property has been retrofitted to withstand such events. Safety is a top concern for tenants.
Des Plaines' climate is typical of the Midwest, with cold winters and hot summers. Properties with good insulation, heating, and air conditioning are more desirable. Tenants will pay a premium for energy-efficient homes. Investing in green upgrades can make your property stand out.
Keep an eye on legislation. Des Plaines' housing laws are always evolving. Being proactive about compliance can save you from costly fines and make your property more attractive to renters.
Partner with a local property management company. Des Plaines' rental market is complex.
A good manager will help you navigate regulations, find and retain tenants, and handle maintenance issues. Their expertise can maximize your investment return and minimize your headaches.
Finally, make solid financial projections, so you get no bad surprises. Our spreadsheet is already compiled with all the data about the Des Plaines housing market.
| Factor | Details |
|---|---|
| Target Demographic | Young professionals and families looking for suburban living with easy access to Chicago. |
| Proximity to Employment Centers | Close to O'Hare International Airport, Allstate Arena, and major corporate offices in the area. |
| Walkability and Public Transport | Good walkability score in downtown Des Plaines, with Metra train service providing quick access to Chicago. |
| Rent Control Considerations | Understand local rental market dynamics. Des Plaines does not have rent control, offering more flexibility in setting rental rates. |
| Property Type | Multi-family units and townhomes are preferred to attract a diverse tenant base and ensure steady income. |
| Neighborhood Selection | Focus on neighborhoods like Downtown Des Plaines, Cumberland, and the areas near Lake Opeka for their amenities and appeal. |
| Flood Zone Considerations | Avoid areas prone to flooding, particularly near the Des Plaines River, unless the property has adequate flood protection measures. |
| Climate Considerations | Properties with good insulation, heating, and air conditioning are more desirable due to the seasonal climate. |
| Energy Efficiency | Invest in energy-efficient upgrades to make the property stand out and attract environmentally conscious tenants. |
| Legislation Awareness | Stay updated on Des Plaines' housing regulations and zoning laws to ensure compliance and avoid fines. |
| Property Management | Partner with a local property management company to navigate regulations, find/retain tenants, and handle maintenance. |
| Development and Redevelopment | Look for areas undergoing redevelopment, such as the downtown area, as property values are likely to rise. |
| Safety | Ensure the property is in a safe area to attract tenants. Check local crime statistics and neighborhood reviews. |
| Tenant Base Stability | Multi-family units and properties near schools and parks provide a steady tenant base. |
| Planning | Know exactly how much you will make each month with this property using the spreadsheet tailored to Des Plaines' market. |
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What makes a really bad property investment in Des Plaines?
When it comes to property investment in Des Plaines, Illinois, some choices are downright disastrous.
Steer clear of neighborhoods with high crime rates and poor public transportation. Areas like the Five Corners and parts of the downtown district, despite some revitalization efforts, remain risky bets. High crime rates drive away potential tenants, leaving you with higher vacancy rates and frequent maintenance headaches from property damage.
Don't even think about investing in single-family homes that fall under strict local rent control ordinances. These properties often come with long-term tenants paying way below market rent. Sure, it's stable, but your income potential is severely limited. Rent control puts a stranglehold on your ability to raise rents, squeezing your margins in a city where property maintenance and taxes are not exactly cheap.
Avoid older properties that haven’t been updated to meet modern building codes, especially those that lack proper flood mitigation measures.
Des Plaines is prone to flooding, particularly in areas near the Des Plaines River. An unretrofitted property is a ticking time bomb. The costs to retrofit for flood prevention are astronomical and simply not worth it. Tenants today are smart—they won’t touch buildings that don’t meet modern safety standards.
Energy efficiency is a must. If a property has outdated systems and poor energy efficiency, stay away. Des Plaines tenants expect modern amenities, and without them, you’ll struggle to attract quality renters. Upgrading these properties can drain your wallet and keep your vacancy rates high until the work is done.
Legal issues are a massive red flag. Avoid properties with complicated ownership histories or ongoing disputes. Des Plaines' zoning laws and historical preservation regulations can be a nightmare to navigate. Properties tied up in legal messes will drain your resources and time, causing endless headaches.
Properties in flood zones or areas prone to severe weather? Forget about it, it’s one of the biggest risks in Des Plaines’ property market. Even if the purchase price seems like a steal, the risk of natural disasters and sky-high insurance costs make them a bad deal. Tenants know these risks too, leading to higher turnover and lower demand.
Finally, stay away from properties needing extensive renovations unless you’re a pro with deep pockets. Des Plaines’ permitting process can be slow and expensive. Renovations always take longer and cost more than you think, eating into your profits. Delays mean no rental income for extended periods, making it hard to cover your mortgage and other expenses.
| Red Flag | Why it's a Red Flag |
|---|---|
| Properties in flood-prone areas | Des Plaines is known for its proximity to the Des Plaines River, which has a history of flooding. Properties in these areas face high insurance costs and frequent flood damage, leading to higher maintenance expenses and potential tenant turnover. |
| Homes near O'Hare Airport | Proximity to O'Hare International Airport means constant noise pollution, which can deter potential tenants. Noise complaints and lower quality of life can lead to higher vacancy rates and lower rental income. |
| Older properties with outdated heating systems | Des Plaines experiences harsh winters, and properties with outdated or inefficient heating systems can lead to high utility bills and tenant dissatisfaction. Upgrading these systems can be costly and time-consuming. |
| Properties with poor public transportation access | Des Plaines has limited public transportation options compared to larger cities. Properties far from Metra stations or bus routes can be less attractive to tenants who rely on public transit, leading to higher vacancy rates. |
| Properties with unresolved zoning issues | Des Plaines has specific zoning laws that can complicate property use. Properties with unresolved zoning issues can face legal challenges, fines, and restrictions on renovations or usage, impacting profitability. |
| Homes with outdated electrical systems | Older homes in Des Plaines may have outdated electrical systems that are not up to code. This poses safety risks and can be expensive to upgrade, deterring potential tenants and increasing liability. |
| Properties in areas with declining school ratings | Families often prioritize good school districts. Properties in areas with declining school ratings can be less attractive to family tenants, leading to higher vacancy rates and lower rental income potential. |
| Homes requiring extensive exterior maintenance | Des Plaines' weather can be harsh on property exteriors. Homes needing extensive roof, siding, or foundation repairs can incur high maintenance costs and frequent repairs, reducing overall profitability. |
99% of successful investors meticulously planned their investments!
Don’t make costly mistakes with your next property in Des Plaines. Make sure you have all the necessary information and data before making a decision.
What's the step-by-step action plan to invest in a good property in Des Plaines, Illinois?
Let’s get straight to the point.
The difference between the best and worst investors in Des Plaines' rental market boils down to how prepared, planned, and persistent they are.
The best investors know their stuff inside out. They’ve done their homework on neighborhoods like the Downtown Des Plaines, Cumberland, and the Lake Opeka area.
They know where professionals and families want to live, what they want in a rental, and how close they want to be to amenities like the Metra station, schools, and parks. They stay updated on local laws and property management trends. This isn't just a side hustle for them; it’s a serious business.
They don’t just wing it. They have a solid plan. They crunch the numbers with a solid and comprehensive spreadsheet tailored to Des Plaines’ market, considering every cost and potential income. They plan for the unexpected because they know Des Plaines' market can be unpredictable.
They’re not just thinking about today; they’re looking at the long game. They have a solid plan to maximise their NOI and rental yield in Des Plaines.
Persistence is their secret weapon. They don’t get easily discouraged. Lost a bidding war? They move on to the next opportunity. Difficult tenant? They deal with it and keep going. They’re always learning, always networking, always hunting for the next great deal.
Now, the worst investors? They’re the opposite. They dive in without knowing the market, make impulsive buys, and don’t plan properly. When things go south, they give up. They see problems as dead ends instead of challenges to overcome.
Don’t be that person. Here is a checklist you can screenshot.
| Step | Action | Details |
|---|---|---|
| 1 | Market Research in Des Plaines | Analyze current market trends, rental demand, and property values. Focus on neighborhoods like Downtown Des Plaines, Cumberland, and the areas near the Des Plaines River. |
| 2 | Define Investment Criteria for Des Plaines | Set clear goals with a solid spreadsheet: target ROI, property type (e.g., single-family homes, multi-family units), and proximity to amenities like the Metra station and O'Hare Airport. |
| 3 | Budget Planning | Determine budget, including purchase price, renovation costs, and contingency funds specific to Des Plaines' market conditions. |
| 4 | Get Pre-Approved for Financing | Secure mortgage pre-approval from local lenders familiar with Des Plaines real estate market to understand borrowing limits and improve negotiation power. |
| 5 | Hire a Local Real Estate Agent Specializing in Investment Properties | Find an agent with experience in Des Plaines' rental market and investment properties, particularly in target neighborhoods. |
| 6 | Identify Potential Properties in Des Plaines | Use Des Plaines-specific online listings, agent recommendations, and property auctions to identify viable options in your target neighborhoods. |
| 7 | Conduct Thorough Due Diligence in Des Plaines | Inspect properties, review historical rental income, check for liens or legal issues, and assess neighborhood trends specific to Des Plaines. |
| 8 | Analyze Rental Potential and Cash Flow in Des Plaines | Calculate expected rental income, expenses (e.g., property management, maintenance), and net cash flow considering Des Plaines' rental rates and demand. |
| 9 | Evaluate Property Management Options in Des Plaines | Decide between self-management or hiring a local professional property management company. |
| 10 | Make an Offer in Des Plaines | Submit offers on selected properties, negotiating price and terms based on Des Plaines market research and financial analysis. |
| 11 | Close the Deal | Finalize the purchase, ensuring all legal and financial requirements are met, including Des Plaines-specific closing costs. |
| 12 | Renovate and Prepare the Property for Rent in Des Plaines | Complete necessary renovations or upgrades to make the property attractive to Des Plaines tenants, considering local design preferences. |
| 13 | Set Competitive Rental Rates in Des Plaines | Price units competitively based on market rates and property amenities, considering high demand areas near public transportation and schools. |
| 14 | Market the Property in Des Plaines | Use online platforms, local advertising, and real estate agents to attract potential tenants, emphasizing proximity to Des Plaines' amenities and transportation hubs. |
| 15 | Screen and Select Tenants in Des Plaines | Conduct background checks, verify income, and select reliable tenants to minimize vacancy and default risks. |
| 16 | Manage the Property in Des Plaines | Regularly maintain the property, handle tenant requests, and ensure timely rent collection, possibly using local management services. |
| 17 | Monitor and Adjust Strategy in Des Plaines | Continuously review financial performance, market conditions, and adjust strategy as needed to maximize investment returns in Des Plaines. |
| 18 | Stay Informed on Des Plaines Legislation | Keep up-to-date with local laws and regulations affecting rental properties and real estate investments in Des Plaines. |
Get accurate financial projections for your real estate investment in Des Plaines
To maximize your ROI on your next property investment in Des Plaines, Illinois, making solid and comprehensive financial projections is crucial. You need accurate data and clear analysis to make informed decisions in this unique market. Guesswork won't cut it.
We have the perfect tool for you: a comprehensive, user-friendly spreadsheet designed specifically for Des Plaines real estate investments. This tool includes all the latest market data—sale prices, rent per square foot, occupancy rates, and more. No more wasting time on research; everything you need is pre-loaded.
Our spreadsheet gives you all the key metrics—NOI, LTV, cap rate, net yield, and more. It's precise, accurate, and easy to use, with clear explanations for every input and indicator. Say goodbye to complex calculations and confusing spreadsheets.
Run different scenarios by adjusting parameters like interest rates, rental income, and operational costs to see how changes affect your investment. This helps you identify hidden risks and opportunities, ensuring you make the best decisions.
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Our tool covers everything: NOI, COC, Cap Rate, Gross Yield, Net Yield, LTV, ROI, and numerous other metrics and charts.
