I will be moving to the Chicago suburbs later this year for a minimum of 2 (likely 3 years) for a new job. I was looking at the rent prices and they seem astronomical compared to the actual cost of the housing. The areas I’m looking at have 1-2 bedroom condos selling for 140k while rent in the same type of buildings is at minimum ~1300/mo.
I want to know if you think it would be worth it to purchase a condo outright to avoid paying rent over the short term. I can afford to pay for a condo in this price range in cash and have 100% job security. However, I have never bought a home and may be missing important details that I hope you can help point out to me.
I know the Chicago area market has been pretty poor after 2008 and relatively flat with minimal appreciation (however I think more recently it has begun to pick up?). I’m not expecting to make a ton of money in the short term, I’m even assuming the condo wouldn’t appreciate over my time frame. But if I look at the sum of condo fees, contents insurance, and property tax it works out to ~$450-500/mo (not taking into consideration utilities as I would have to pay that if I rented anyways). I know selling the condo will have fees associated with ~6% of the overall cost, and assuming worst case scenario I only live there for 2 years and sell afterwards, I could average out the selling costs over the period of living and that would add another ~400$/mo in costs of living. So in total, taking into account selling fees and monthly expenses, it looks like it would cost ~900/mo to live in a condo I would purchase.
Comparing the ~900 to 1300 even in a 2 year time period (shortest time frame) would mean I would save ~ $9600 compared to renting. In the more likely scenario of 3 years, which would lower the average monthly price bump associated with selling fees from 400–>266/mo, I would actually save ~ $13000 over renting. Of course, this is assuming that the price of the condo neither increases nor decreases.
Is there something I am missing? Even in the short term it looks beneficial to purchase a condo at these values.
Edit: I am looking in the Orland Park, Naperville, Downers Grove, La Grange areas