What do you think of when someone mentions the South Side of Chicago? Is it gangs? Drugs? Crime? If you ask me what comes to mind, I’d say, “Opportunity.”
You might be surprised by this. My friend Todd was too when I asserted this idea while tightly tucked into a booth at the bare-bones South Side favorite, Birrieria Zaragoza, and drooling over large plates of tacos for lunch. In between bites, I told him that despite the reputation south of the Loop, there are a lot of decent, safe neighborhoods where strategic investors can make a difference—and potentially turn a profit. If your interest is piqued, read on. I’m going to lay out everything I told Todd and what you need to know about investing in the South Side of Chicago.
Chicago’s South Side is Ripe for Investing
To begin to understand the potential of investing in the South Side of Chicago, we need to untangle the complex threads that make up its real estate property market. What many don’t recognize is that there’s a lot of income disparity, with areas such as Hyde Park and Kenwood home to very affluent Chicagoans. However, these pockets of affluence have done little to help the overall South Side property market. Foreclosures make up 40% of properties sold in nine South Side neighborhoods and home prices continue to fall in many others.
There are still deals to be had, but you should get them before the foreclosure process happens or you’re likely to overpay. Just don’t expect to sell the properties right away as most South Side locals simply won’t be able to afford the market price for an updated home. If you can find a distressed property and bring it up to code, however, you shouldn’t struggle to find tenants. There’s a huge demand for affordable rental accommodations with around 500,000 households competing for just 325,000 affordable units in Chicago’s South Side. The South Side is the place you want to maintain a buy-and-hold strategy for a while yet as revitalization plans unfold.
Both the city council and foreign firms are investing heavily in order to revitalize neighborhoods south of the Loop. Two European firms are currently in talks to buy and develop the vacant South Works site. The 440-acre site, which has been vacant since U.S. Steel closed the plant there 29 years ago, had been previously set for redevelopment several times before construction fell through. But under a city-wide push for redevelopment, Emerald Living and Barcelona Housing Systems planned to develop as many as 20,000 environmentally-friendly homes on it, including commercial and retail space.
This push also helped to close a deal in which developer Related Midwest purchased 62 acres of land between South Loop and Chinatown. It is expected to be one of the biggest redevelopments in the city’s history. The $5 billion project may include over 10 million square feet of commercial and residential space in a ‘24-hour-style’ neighborhood where Chicagoans can live, work, and play.
It’s not just multi-billion dollar redevelopment projects that are taking place, though. Investments in specific South Side neighborhoods have already jumped. In Woodlawn, for instance. a series of redevelopments, capped off by the announcement that the Barack Obama Presidential Library will make its home there, have made the neighborhood a popular up-and-coming destination—and one of Chicago’s hottest neighborhoods. With these projects, developers can give a serious boost to a neighborhood’s appeal and help investors to make rehabbed investment properties in South Side even more enticing when it comes time to sell.
Finding South Side Investment Properties Before Prices Go Up
While you may not receive the backing of the city government or have the resources of a billion-dollar real estate developer, you can still get in on the real estate market in South Side. As an independently owned and operated HomeVestors® franchisee, you could be the first call that distressed homeowners make when they need to get out of an “ugly” financial situation. With the nationally-known “We Buy Ugly Houses®” marketing campaign behind your real estate investing business, adding South Side properties to your portfolio doesn’t have to be challenging or complicated.
Looking for more leads on investment houses in Chicago? Don’t wait, call HomeVestors® today.
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