When she returned to Chicago recently after several years absence, Rita Ciolek was surprised by how much renting had changed. Prices for downtown apartments had skyrocketed, incentives like one or two months’ free rent were gone and desirable units disappeared at warp speed.
“Most units go within 24 to 48 hours,” said Ciolek, a 37-year-old tax accountant, who lost one apartment because she thought about it for 24 hours.
Nationally, vacancy rates are at some of the lowest levels in a decade, according to research firm Reis Inc. Ron DeVries, vice president of Appraisal Research Counselors, said fourth-quarter 2011 occupancy in prime buildings in downtown Chicago was 94 percent. Suburban occupancy rates reached the same level, he added.
“It’s about as tight I’ve ever seen it,” said Maurice Ortiz, marketing director for the Apartment People, who has been in the locater business for 13 years “I used to say visit eight to 10 apartments before making a decision. Now it’s more like three or four.”
“The market has definitely shifted to the landlords,” said Bryan Pritchard, principal of Tricap Preferred, an apartment locater concentrating on luxury apartments in center city neighborhoods, including River North, Streeterville, Gold Coast and the Loop.
Scrambling to cash in, developers are building thousands of apartments in downtown Chicago. Those projects will ease, maybe even end, the supply shortage, but most will not come on line until next year and 2014, DeVries said.
Suburbs also are adding apartments where condominiums or town houses were once planned.
Orland Park’s Main Street downtown redevelopment, now under way, will have 295 apartments instead of condos. Neighboring Tinley Park is considering a plan for 167 rental units in place of town houses envisioned several years ago.
With Chicago’s peak warm weather leasing season kicking into high gear, renters recently in the market, locaters and management executives say those looking could find it challenging and should be prepared for sticker shock. To help, they offer the following tips:
Shop early. This is not the year to dawdle, especially if you are looking downtown, said Pritchard. He advises, “Start looking 60 days before the existing lease expires.”
Lori Postma, director of marketing for Reside Living, manager of 2,000 units on the city’s North Side, recommends starting even earlier because more tenants in desirable properties are staying put. Allow enough time to learn what options will be available in your time frame and, if possible, give your name to the building manager or management company to be first in line when a unit turns over, she said.
Shopping early increases the chances of finding a “good deal,” like the one Northwestern University medical student Kirsten Anderson and her fiance believe they got with a privately owned, one-bedroom condo within walking distance of Northwestern’s downtown campus.
The condo has no view but includes an in-unit laundry and granite countertops for $1,500 a month, including utilities. That is less than the $1,850 plus utilities Anderson and her current roommate pay for a two-bedroom unit. It is significantly less than the $1,900 to $2,200 rents listed on her building’s website.
Make a budget. Pritchard advises financial candor by saying, “My budget is (name your figure) inclusive of utilities.”
The traditional security deposit, usually an amount equivalent to one or more months rent, is disappearing at many, but not all, larger properties, said Ortiz. Instead of the security deposit, prospective tenants at the newer, large apartment complexes are asked to pay an application fee, a bond or one-time move-in fee in lieu of a security deposit and must have renters insurance, which is required before signing the lease. In addition, a number of larger properties may add a monthly utility assessment.
If a pet is part of the household, expect to pay a one-time pet deposit or a monthly assessment for Fido or Fluffy. Monthly parking can run up to $300 a month downtown, so consider ditching the car for public transportation or locate near a car-sharing station, Ortiz noted.
Security deposits are not disappearing altogether and are required by many smaller, independently owned buildings in city neighborhoods and suburbs where rents, in general, are less and where, anecdotally, there is greater availability.
Ask if utilities are included, as they can add significantly to the monthly tab. If you have a car, and rent where on-street parking is the norm, check whether neighborhood vehicle stickers and visitor passes are required.
Prioritize. In the past, people often shopped around to get ideas of what they wanted in an apartment, but in the current market it is important to start shopping with a firm fix on the “must haves,” said Ortiz.
Scott Gregory, 27, and his fiance had a week to find an apartment when he was transferred by his company from Bloomington, Ill., to the Chicago area in mid-January. The couple needed space for furniture from a three-bedroom house, a pet and three cars. They rented at Alara at Summerfield by RMK Communities in Aurora because it had those basic requirement and “all the amenities we cared about; a nice pool was a pretty big deal and it has that,” Gregory said.
Stay flexible. After being cramped in a one-bedroom apartment for a year and notified of an 8 percent rent hike, Jennifer Long, 24, and her fiance, Nicholas Serafini, 27, a medical resident at Rush University Medical Center, decided to look for a bigger home.
They hunted for a two-bedroom unit downtown to be close to work, with amenities such as stainless steel appliances. They found a condo that was perfect, but at $2,400 a month it was more than their specified $1,900 to $2,000 budget.
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“We upped our budget $500 within an hour,” Long said, but still lost the unit.
They continued to search, now with the higher monthly figure, and leased a one-bedroom loft-style apartment at Onterie Lofts in Streeterville. With 1,400 square feet, the apartment is as big as a two bedroom and has enough space to carve out a coveted home office. Furthermore, it has two bathrooms, a walk-in laundry and several big closets, features that make the unit comfortable for the long term, Long said.
Be decisive. Mario Greco, senior broker and vice president of sales for Prudential Rubloff Properties, advises clients to bring a credit report and a blank check so they are ready to seal the deal when they see what they want. Others may not go quite that far, but all agree time, usually 24 to 48 hours, is of the essence.
Such a quick time frame can be a problem for whose who are on the scene searching for an apartment to share with someone not yet in Chicago. Modern technology is a big help in closing that gap, Postma said.
“We can get online and walk the (distant roommate) through the (property) website” to come to a decision, she said.
Anderson and Long say locater services, usually paid for by the apartment owners or managers, can save time in finding suitable options and lining up appointments.
However, not all rentals work with locaters, noted Ciolek. When she was apartment hunting in January, she was starting a new job and applying to graduate schools. She needed to be downtown near the train station and the expressways for work, but was comfortable signing only a six-month lease because her grad school plans were undecided.
Since she had worked and lived in Chicago before, she visited leasing offices on her own, “because no agent was able to explain my situation better than me.”
In February, she moved into Trio, a Marquette Cos. property in the Fulton River district. The rent for her short-term lease is more than if she had signed a standard one-year contract, but “that was worth it for me,” she said.