Chicago homeowners are in better financial shape than renters when it comes to monthly cash flow, according to a study by PropertyShark and RENTCafe. The study examined the median incomes, monthly living expenses and the housing costs of homeowners and renters in 50 large U.S. cities.
Nationally, homeowners came out ahead in 44 of the 50 cities, including Chicago. The degree of financial advantage varied widely by city. In Chicago, homeowners average about $792 per month in disposable income. Go north to Milwaukee, and homeowners average only about $63 a month in disposable income. (Milwaukee has a lower median income, and higher property tax rates.)
But even in cities where home ownership doesn’t reflect a huge advantage in monthly disposable income, homeowners still have the better financial position. That’s because the cash flow of renters is usually far worse. In Milwaukee, renters average negative disposable income of $927 a month. In Chicago, renters average a negative disposable income of $1,115 a month! You can see more city-by-city comparisons, along with explanations of the metrics, in the PropertyShark article.
The basic reason for the disparity is this: a large median income doesn’t always guarantee better monthly cash flow for renters, due to high rental costs that can keep climbing year after year. In comparison, a homeowner with a fixed-rate mortgage has protection against rising housing costs. Owning a home is one of the few ways you can give yourself protection against inflation.
Of course, home ownership isn’t a guarantee of wealth. You need to plan ahead for home buying and be financially prepared. You’ll need some reserve funds to handle maintenance and repairs, and ideally, a rainy day fund to cover a few months of living expenses. Buying a home wisely will put you on the best path for success!
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Ryan Gable Broker/CEO Starting Point Realty Phone: 847.348.1154 Email: RyanGable@startingpointrealty.com https://startingpointrealty.com/ Become a StartingPoint Realty Facebook Fan Follow StartingPoint Realty on Twitter