Mid-Year Update

With July now over, this summer has undoubtedly been the busiest season in our company’s history, and we should finish with the same strength and hustle for which it started.

Last November we said we would focus on initiating lease renewal conversations with tenants as early as possible. We concentrated on retaining tenants at maximum rents. We minimized vacancies by continuously monitoring and analyzing the rental market in real-time. All available apartments were leased quickly and for the highest rents possible.

Here’s an update on the results from our efforts thus far:

  • 63% of our portfolio renewed in 2018.
  • Of the 63% renewed, rents increased by an average of 3.5%.
  • For the 37% turnover, we’ve kept the vacancy rate below 3%.
  • In spite of newer, more challenging market conditions, we’ve increased rents of the 37% by 3%.
  • Of the 37% who vacated, we did more than 100 turnovers, half of which were 24-hour turnovers!


Another improvement we’ve focused on is faster and cheaper apartment turnovers. So far, we’ve decreased the cost of the process by 26% year-over-year by investing in an in-house general contractor. We’ve spent a lot of energy transforming the often scattered, three-day process into a 24-hour streamlined military operation, and the feedback we’ve received has been positive.


High Fidelity’s growth has been positive as well. We continue to build our portfolio and staff at a steady pace of 27% year-over-year. As we develop and refine our skill sets, the number one focus has, and will always be on delivering an A-class service to our clients. We’re constantly expanding and creating roles, promoting from within and adding more in-house positions to eliminate third party vendors which results in reliable, cost effective service for our owners.

2018 Chicago Summer Rental Market Snapshot

A strong supply of new rental inventory has flooded the Chicago market in recent years and even more inventory will be added throughout 2018. With more than 9,000 new units added to the mix in 2016 alone, this has contributed to decreased/flat rents thus far for the year (a decrease of 6-8% annually YOY). These trends are expected to continue all the way through 2019.

What can landlords do to avoid vacancies in the present market?

Keep present rents flat or offer a small increase and list your unit at least 60 days out from current lease expiration date.

2018 Chicago Summer Sales Market Snapshot

While the rental market has seen flat or decreased rents based on abundant supply in the market, the sales market has experienced just the opposite. Demand is far exceeding supply by a large percentage in 2018.

Based on Midwest Real Estate Data Service data, month-over-month for January, there was a 17% decrease in sales inventory, ultimately bumping the average sales price of a Chicago property by 10.1%. Demand has continued to surge throughout the spring and summer months and the trend is expected to continue throughout the year.



Chicago Rental & Sales Market Snapshot For Summer of 2018

2122 W Potomac #2 Exterior


2018 Chicago Summer Rental Market Snapshot

A strong supply of new rental inventory has flooded the Chicago market in recent years and even more inventory will be added throughout 2018. With more than 9,000 new units added to the mix in 2015-16 alone, this has contributed to decreased/flat rents thus far for the year (a decrease of 6-8% annually YOY). These trends are expected to continue all the way through 2019.

What can landlords do to avoid vacancies in the present market?
  • Keep present rents flat or offer a small increase
  • List your unit at least 60 days out from current lease expiration date
2018 Chicago Summer Sales Market Snapshot
While the rental market has seen flat or decreased rents based on abundant supply in the market, the sales market has experienced just the opposite. Demand is far exceeding supply by a large percentage in 2018.
Based on Midwest Real Estate Data Service data, month-over-month for January, there was a 17% decrease in sales inventory, ultimately bumping the average sales price of a Chicago property by 10.1%. Demand has continued to surge throughout the spring and summer months and the trend is expected to continue throughout the year.


2018 Rental Market Outlook From The Owner of High Fidelity Property Management

Dear Clients and Associates,

I recently attended the Chicagoland Apartment Association 2018 rental market preview breakfast. There was a lot of information disseminated, and I think it’s important to share some of the key takeaways.

THE BIG PICTURE – The U.S. Economy Today – James Glassman, Head Economist, JP Morgan Chase

  • Despite much pessimism in the news, when looking at the data, the US economy seems to be back on its feet since the crash.
  • Overall, real estate pricing is back to where it was at the peak. New demand has been created from baby boomer’s kids. There is still lot of pent-up demand from 20- to 30-year-olds because many postponed major life decisions during the recovery.
  • The Fed took bold steps to battle the financial crisis by purchasing 4 trillion dollars in treasury bonds and some mortgage backed securities in an unprecedented attempt to boost economic growth. With the economy healthier, and mixed opinions on how the bond purchases actually helped, the Fed is preparing to gradually start trimming their holdings this year, ultimately offloading roughly $2 trillion.
  • Banks are more heavily regulated since the market crash and bound to a liquidity coverage ratio (LCR). This requires them to hold sufficient levels of high-quality liquid assets against expected net liquid outflows over a thirty-day stress period, to further promote short-term resilience.
  • Once the central bank gets these treasury bonds and mortgage backed securities off of their books, we can expect moderately higher interest rates. It is estimated that this will take at least another four years.
  • Chicago has modest, but positive employment growth, tracking 15,000+ new jobs last year, and 3% total growth since 2013.


  • There is an oversupply of rental product and the glut of downtown apartments has rippled into the neighborhoods. Competition now is stronger than ever and renters have a lot to choose from. There is still activity, but no sense of urgency. The only way to compete is with pricing.
  • If we strip out buildings that are still in lease-up, and only look at buildings that have been stabilized for at least 1 year, average rent growth is down by -1.86%.  Expect rents to decline in 2018.
  • Given that Chicago’s rental cycle is seasonal, Q4 2017 and Q1 2018 should be the lowest occupancy and pricing we’ve seen in a while.
  • Developers are betting on urbanization, with Chicago’s population density outpacing other major metros. Building development pipeline is big – 1500 units were added in 2017 and 3500 are scheduled to deliver in 2018.
  • Occupancy in stabilized buildings is at 93%.  Expect occupancy to decline in 2018.
  • Absorption is at a record pace and growing.


  • 22 to 32-year-old buyers are purchasing mainly in the $300K-$500K range, which as a developer is difficult to finance and build new, because construction costs are up 30% from seven years ago, and labor costs have also gone up.
  • The majority of condo sale transactions are re-sales because new construction condos are almost non-existent, barring smaller (2-6 unit) and a few mid-rise buildings.
  • Pricing will continue to trend modestly upward as there is still strong pent-up demand for mid-priced, new units.
  • Expect to see more de-conversions of modest condo buildings.

As for us at High Fidelity, we’re going to focus on renewals and retention, initiating contact with tenants over 90 days out from their expiration date with renewal terms. We’ll engage in discussions on why they’re staying or leaving, focusing on retaining as many tenants as possible. When tenants notify they will not be renewing, we’ll market the property 60 days out from the lease expiration date to give enough time for price adjustments, if needed.


John McGeown


High Fidelity Property Management


Chicago’s Top-9 Neighborhood Events in June

Rib Fest

Chicago is all about neighborhoods and June welcomes in warmer weather and some of our best local events. Whether it comes to music, food, beer and even a parade or two, we sorted out our Top-9 favorite attractions for the month in 2017.

Maifest in Lincoln SquareJune 1 through 4 –It’s all about beer, lots of beer, at Maifest, in the heart of the square. Live music and great German food throughout the festival, as well.


Do Division Street Fest in East Village–June 2 to 4—10 city blocks of Nationally recognized bands, great local food, and sidewalk sales in the heart of one of Chicago’s best neighborhoods. What isn’t to like?


Rib Fest in North Center—June 9 to 11–One of Chicago’s biggest Rib Fests with live music some of the best, award-winning area vendors from Chicago and surrounding suburbs. Vote for your favorite Rib Fest vendor of all.


Andersonville Midsommerfest—June 9 to 11—A celebration of Swedish heritage, local food, and dancing at Clark Street and Foster Avenues.


Pilsen Food Truck FestivalJune 10 and 11—Featuring more than 35 local food-truck vendors from Pilsen and beyond, this food-centric event at 18th Street and Allport also features live music programmed by Thalia Hall.


Green Music Fest—Wicker Park—June 10 and 11–Tons of great food, live music on three stages, promoting an environmentally friendly lifestyle;;;


Printer’s Row Lit Fest—June 10 and 11—This event features book publishers, local booksellers, panels, and discussions. This is the largest book-related event in Chicago and a nationally recognized, literature event.


Taste of Randolph—West Loop—June 16 to June 18: The West Loop has become one of Chicago’s meccas for the best food and some of the best will be here this year including Publican Quality Meats6 blocks long and nationally acclaimed musical acts, as well.


Chicago Pride Parade in Lakeview—June 25–More than 1,000,000 attendees every year attend the LGBT Pride Parade at Halsted and Waveland avenues.



Why Are Rental Properties Such A Great Investment?


Rental-property owners take note: With tax season just around the corner, we compiled a list the best reasons rental properties are such great investments:


Residential rental property is the only investment asset that both appreciates and depreciates at the same time. When the value goes up on your property, the increase in value is money you can keep. Depreciation offers you a level of compensation for that wear and tear in the form of substantial write-offs.


Deductions that are less obvious include expenses to obtain a mortgage and fees charged by an accountant to prepare are Schedule E. A rental home can even be a houseboat or trailer, as long as there are sleeping, cooking, and bathroom facilities. The location of the rental home doesn’t matter—It can be in the United States or overseas.


For any business or property owner, the importance of keeping good records on a consistent basis is of the upmost importance.


The following is a list of some of the best write-offs regarding rental properties (each may have certain restrictions):


  • Homeowner’s association (HOA) or condo fees
  • Utilities
  • Insurance
  • Property taxes
  • Management fees (e.g. Property Management)
  • Pest control
  • Landscaping
  • Mortgage interest
  • Other interest
  • Bank fees
  • Supplies
  • Education/professional development
  • Licenses/permits
  • Leasing fees
  • Legal & professional fees
  • Office/telephone
  • Postage/shipping
  • Travel
  • Meals & entertainment
  • Automobile/car expenses
  • Repairs*
  • Appliances/fixtures/equipment*
  • Minor improvements*
  • Major improvements/new assets*
  • Depreciation



For More Information:








Our Top 7 Housing-Market Predictions for 2017

1668 Olive New Exterior

As we approach the upcoming busy spring Housing market, we took a closer look at the many predictions various experts have made for the housing market in 2017. Here are some of the most noteworthy ones:

1. Prices will continue to rise–but more slowly. Redfin predicts the median home sale prices to gain 5.3% in 2017 compared to 2016, which would not be a major change from the 5.5% year-over-year gain expected to close out this year.

2. More people will have access to home loans. Fannie Mae and Freddie Mac will raise its loan limits for the first time since 2006, increasing the the limits to $424,100 for most of the country and to $636,150 for the most expensive markets. “This change makes it easier for more homebuyers to qualify for a mortgage in high-priced markets,” Redfin said.

3. Fewer homes on the market and fast-moving markets. Inventory for 2017 is down an average of 11 percent in the top 100 metro markets, and improvement is not expected this year. Homes are selling 14 percent faster based on the tight inventory.

4. Housing Construction Starts Will Slowly Rise.  New construction is not expected to keep up with demand in 2017. More and more renters are expected to become homeowners in the next decade as the market continues to recover.

5. Mortgage rates are forecast to stay low.

With Trump in power, lending requirements are expected to be eased, land opened up for development, and some experts predict this will stimulate home purchases. With employment slowly growing and wages moderating upward, the market may be set for more growth.

6. Millennials and boomers will be big buyers. More jobs are being created for 25- to 34-year-olds than any other age group, and wages are rising. Baby boomers are also looking to move as they reach retirement years.

7. Cities will see dense development with smaller homes near public transit. “Affordability” is a major issue that many mayors and cities see as issues for home owners. A solution is to build smaller homes in more dense areas near public transit.

For more information, see the following:







Pilsen: Summer Neighborhood Spotlight

National Museum of Mexican Art

Pilsen is rich with traditions and community activities– a great place to live, work and dine at some of Chicago’s most authentic Mexican restaurants. Located about 12 blocks south of downtown, Pilsen took its name from Czech settlers in the 19th century who eventually made way to many generations of Mexican immigrants.


Here are some of our favorite Pilsen attractions:


Chicago Arts District—2nd Fridays: Centered around South Halsted and 18th Streets, 2nd Fridays Gallery night features opening receptions at galleries and artists’ studios in 30+ creative spaces, showcasing Chicago and national artists.


National Museum of Mexican Art: Located on 19th St., the free-entry museum showcases 3,000 years of art from both sides of the border through its vast 10,000-piece permanent collection. The National Museum of Mexican Art is the only Latino museum accredited by American Alliance of Museums.


Thalia Hall: A historic landmark building located at 1807 S Allport, the structure was modeled after the Prague Opera House. Thalia Hall was founded by John Dusek at the turn of the century as a meeting establishment for locals. In 2013, Bruce Finkelman and Craig Golden created three new concepts inside the property including a beer-inspired restaurant, a cocktail bar and a public hall for national entertainment acts.


Community Lowrider Fest: August 21. A community festival based in the industrial corridor of Pilsen, this Chicago festival brings together car and bike clubs from all across the Midwest, and features a curated line-up of local talent, mariachis and a special awards ceremony.


Laguanitas Brewing Company: The 2nd location of this well-known California brewer, the brewery opened last summer in a former steel warehouse. The building features a taproom, walking tours and daily live music.


More information on the Pilsen community:












Six Chicago Destinations You Don’t Want To Miss in May


Adult Night at Lincoln Park Zoo

Chicago is never at a loss for activities. We culled the lists of the hundreds of events/activities taking place in the Chicago area during the month of May, and came up with our list of 6 personal favorites…

Vincent van Gogh’s Bedroom Exhibit

Through May 10, 2016

Vincent van Gogh’s bedroom held special significance for the artist, who created three distinct paintings of this intimate space from 1888 to 1889. This exhibition—presented only at the Art Institute of Chicago—brings together all three versions of The Bedroom for the first time in North America.


Creativity Expo

May 13 – 15, 2016

Hear experts speak about art, fashion, film, food, and music at Lake FX Summit + Expo (formerly called Chicago Music/Film/Fashion+ Summit) at Chicago Cultural Center. Free.

Craft Beer Week

May 19 – 29, 2016

Chicago Craft Beer Week features hundreds of craft beer events in the greater Chicago area, from special $4 tastings of rare beers to beer dinners. The event is sponsored by the Illinois Craft Brewer’s Guild.

Food Truck Evening

May 21, 2016 (6:30 to 10:30 p.m.)

Food Truck Social features 30 trucks selling food and beverages, activities, live music, and an opportunity to wander Lincoln Park Zoo after hours.

Frank Lloyd Wright Architectural Tour

May 21, 2016

Greater Chicago area

Tour innovative homes and buildings designed by Frank Lloyd Wright on the Wright Plus walk.

Walk With The Dogs

May 21, 2016 (9 a.m., register 7 to 9)

Walk a 5K along the lakefront with your dog during Bark in the Park, followed by games and activities on the green near Soldier Field

For more events, see:



4 Prime Chicago Neighborhoods For Investment in 2016

845 Leavitt Exterior

Whether you are evaluating property for your own personal residence, or you would like to invest in a property separately for short-/long-term financial gains, one consideration you will want to make is which Chicago neighborhoods have the most potential for the highest returns on your investment? Here are some of our top recommendations:


Logan Square—The opening of The 606 trail last summer and the continuing evolution of some of Chicago’s best restaurants and drinking establishments has continued to make Logan a prime destination for first-time buyers, investors and renters alike.








Albany Park—One of Chicago’s most ethnically diverse neighborhoods, with excellent proximity to public transportation, highways, parks, etc., Albany Park has reasonable rents and is an excellent target for growing property values.






Pilsen—Home to the city’s largest Hispanic population, Pilsen has a rich and vibrant Art history including home to the National Museum of Mexican Art. Artists have flocked to Pilsen’s loft-style buildings for its reasonable rents. Pilsen is also home to some of the best Mexican cuisine in the city.






West Town—With its close proximity to downtown, West Town is full of unique architecture—small brick cottages to historic churches. Many flock to the numerous coffee houses, bars, theaters, galleries, music venues, street festivals and restaurants. Although new investors have targeted this area for the last few years, there are still solid properties to be found.







Should You Consider Hiring A Property Manager?


A good property management company does not just take care of small repairs, maintain common areas and collect rents for a reasonable fee. The best property manager can provide expertise in market rental rates, screen for the best tenants and advise on all facets of major repairs/capital improvements and neighborhood trends.


Here are some of the top reasons you should think about hiring a property manager:


Maximize your time. What is your time worth to you? Bringing in a great property manager can not only free up your personal time, but can give you more time to investigate further investment opportunities.


Collecting rents and managing tenant requests/relationships. Communication is essential in property management.  An effective property manager provides timely service related to repair requests, move-in/move-outs and rent/lease-related issues.


Bringing in the best vendors. Effective property managers typically have a well-vetted, in-house and third-party list of vendors who can take care of everything from minor repairs to more substantial electrical, plumbing and capital-improvement repairs/renovations.


Setting proper rental rates for your property and ensuring you are in compliance with all housing laws.  There are many factors that contribute to determining market rental rates for your property. A reputable property management company is up-to-date on market/neighborhood conditions and new laws/regulations related to all housing matters.


Marketing and advertising your property. An experienced property manager is well-versed in the best marketing (digital and analog) channels to market your units in the most effective ways. Filling vacancies quickly is a top priority for the best property management companies.


For more information on hiring property managers, please see the following articles: