Opportunity Cost: Just how expensive is renting in the Chicago area?
Want to know the real cost of renting in the Chicago area?
HotPads, a rental and real estate search site owned by Zillow, analyzed U.S. government data from the Census Bureau and the Bureau of Labor Statistics as well as its own rental data to determine how many years each generation spent or will spend renting in their lifetime.
The results paint an expensive portrait.
Millennials in the Chicago area will rent for an average of 12 years, HotPads reports, and devote $239,700 to rent during that dozen-year period with a median monthly leasing rate of $1,630.
For Gen Z, the post-Millennial generation now beginning to enter the working world, that number will be even greater. Though HotPads predicts Gen Z will rent for 11 years, one year less than Millennials, this youthful generation will pour an estimated $270,000 into the coffers of Chicago area property owners.
While it would be unfair and overly simplistic to say renters receive nothing for that sizable investment – housing, after all, is a life necessity – the truth is that money devoted to rent builds the landlord’s equity, not the tenant’s.
With every mortgage payment as a homeowner, you’re that much closer to owning the home. And as your home value will most likely increase in value over time, you can reap the rewards of appreciation down the line. The median sales price in Cook County jumped nearly 4 percent from 2018 to 2019, according to RE/MAX data.
Homeowners also reap tax advantages that renters do not. Property taxes and mortgage interest, for instance, are both tax deductible. That’s real dollars and cents that renters do not see.
Beyond those financial benefits, homeownership provides other appealing lifestyle advantages as well. There are the comforts of privacy, the squelching of restrictive landlord covenants, and the freedom to appoint your home however you deem fit. If you want to paint the walls bright green, have at it. If you want to play your drums, pound away. If you want two Great Danes, enjoy. It’s your home and your plot of land.
Combine the pluses of homeownership with mortgage rates still hovering near historic lows – traditional 30-year fixed mortgages continue swarming around the 4 percent mark – and it’s a perfect storm to leave the renting game for good and put that $200,000 to better use.