I’ve noticed, walking through the neighborhoods of west side Chicago recently, that the scene is really shifting. For many years, young hipsters seeking creative and artistic communities have called this area home. The trend-setting crowd brought with them trendy new bars and restaurants, which in turn attracted a new, more affluent crowd. Once home to the college and post-grad demographics, a new wave of professionals is now moving in. High rises lining Milwaukee Ave through neighborhoods like Logan Square and Wicker Park are driving up the cost of living for those who called these areas home before the development, and now, they’re finding it hard to stay.
This displacement becomes a new market for Chicago investment opportunities for the landlord investor willing to reorient and market to these changing demographics. Millennials moving out will likely continue to rent, and where they rent, they’ll look for newly renovated units. As the west side of the city experiences its real estate boom in neighborhoods focused around Milwaukee Ave, hipsters will likely seek new residences in areas like Humboldt Park and Bucktown. As with the growth and development in Logan and Wicker, their migration will happen quickly, so an investor will need to work fast.
The Market Flux—Priced Out of Westside Hot Spots
The development of Chicago’s westside neighborhoods Logan Square and Wicker Park came hand-in-hand with the rise of their hipster populations. This group typically consisted of college students and recently graduated young people entering the workforce who looked to these areas for creative enclaves where they could find like-minded, urban, and progressive crowds coupled with inexpensive rents.
Unfortunately, their moving in brought increased popularity and awareness to these areas, hiking rents beyond what they could afford. Market research shows that both neighborhoods experienced rent jumps year-over-year averaging nearly 10%, while surrounding neighborhoods increased at a more negligible rate. Without rapid income increases to match, hipsters just aren’t able to hold onto their apartments in Logan and Wicker.
The Demographic—Large, and Lacking Home-Buying Ambitions
The hipsters residing in Logan Square and Wicker Park belong to the generation subject to a lot of market speculation right now—Millennials. With every industry imaginable trying to anticipate the habits of the largest age bracket in the country, some observations have given us a rough idea. Millennials, more so than past generations, are more likely to rent longer into their adult lives as opposed to buying homes. Shouldering student loan debt makes a down payment unattainable for many of them, and lower credit scores put mortgage approvals out of reach.
This makes for a large segment of the population already residing in apartments or seeking rentals at any given time. Where there is a high concentration of Millennials, that desire becomes a condensed, hot market. Chicago has been listed as one of the top destinations for Millennials in the country, joining other urban environments where younger crowds live. All this adds up to a prime opportunity for anyone willing to cater to the demographic of younger renters too early in their careers for expensive high rise rents or mortgages.
The Next Best Thing—Humboldt Park and Bucktown Neighborhoods
What first made the appeal of Wicker Park and Logan Square so tantalizing to Chicago’s hipsters was its affordability and accessibility, in lieu of unattainable downtown apartments. For the same reasons, this demographic will now move to Humboldt Park and Bucktown. Bucktown is another stop closer to downtown on the Blue Line, and Humboldt shares its borders with Logan, Wicker, and Humboldt, making it the inexpensive alternative.
There’s already interest brewing, with the 606 bike trail showing off Humboldt’s quiet charms to bikers and joggers from the surrounding area, and a new development in Bucktown that will replace a dirty, abandoned lot with new units. This shows the promise of growth and upscaling similar to Logan and Wicker, but earlier in that process. They teeter on the precipice of becoming the next hottest neighborhoods in the city, and a motivated investor can make the most of this opportunity.
The Outreach—How to Attract Millennial Renters
Marketing your Chicago property to Millennials means knowing your renter base and how to reach them. Here are some things to consider when targeting Millennial hipsters:
- Get online. An aesthetically pleasing and well-designed website or internet listing is the best method to reach this demographic. Their generation is characterized by technology use.
- Social media. You may have a beautiful website, but if no one is visiting, it won’t help you. Create accounts and advertisements on Facebook, Twitter, and Instagram.
- Craft an image. Hipsters are looking to congregate with other hipsters. When you advertise, ensure that you include models that look like your target renter.
The Hustle—Moving Fast to Capitalize
There is an incredible opportunity to landlords and investors willing to put in the work on multi-unit properties in need of rehab work in Humboldt Park and Bucktown. For the less experienced investor, the idea of putting in the legwork to learn a new market, find a good property, make a deal, and spruce it up in time to rent to the hipster crowd may seem impossible. That’s where HomeVestors® can tip the scales in your favor.
- Branding. Our presence is made well known by a series of expert marketing campaigns that engrain our name with potential sellers in target areas.
- Buying expertise. Our franchisees already have their feet on the ground, mapping out the best locations and properties to concentrate on, cutting out search time for investors.
- Professional relationships. HomeVestors® has working relationships with a collection of professional contractors ready to set to work rehabbing old properties.
Combining the experience of a small-time investor or landlord with the notoriety, knowledge, and marketing tools for investors, HomeVestors® makes for a strong investment opportunity in the burgeoning hipster enclaves of Chicago’s westside neighborhoods. Contact HomeVestors® today to request franchise consideration.
Each franchise office is independently owned and operated.