In January 2016, local Chicago newspapers ran the obituary of a Chicago landlord. His name was Jay Michael and he had died at the age of 34 after a long battle with non-Hodgkin’s lymphoma. He had made his name by investing in unused real estate in struggling neighborhoods. In October 2018, local Chicago newspapers ran the obituary of another Chicago landlord. His name was Louis Wolf and he had died at the age of 94 after years of failing health. He had also made his name by investing in unused real estate in struggling neighborhoods.
Michael’s obituary contains words such as “brainchild,” “creative,” and “forward-thinking.” Wolf’s is peppered with more sinister terms: “cautionary,” “ruthless,” and always in the same sentence with his name, “notorious slumlord.”
Two famous figures in the local rental industry, of the same faith, race and gender, working in the same neighborhood. One, born into wealth in the 1980’s is praised as a hero, although not without his critics. The other, born into poverty in the 1920’s, is condemned as the “worst landlord in Chicago history,” but was also a proud grandfather who is remembered by those close to him as a quiet and kind mentor. What can we learn about being a landlord from the divide between the two? Continue reading Wolf and Jay: Two Landlords’ Approaches to a Troubled Neighborhood
At the July 25, 2018 meeting of the Chicago City Council, Alderman Moreno of the 1st ward proposed an amendment to Chapter 5, section 12 of the city code, also known as the Chicago Residential Landlord Tenant Ordinance or CRLTO. The proposed change is currently in the hands of the council’s Committee on Housing and Real Estate. The amendment would require landlords to provide lease renewals to tenants with specific lead times dependent on the amount their rent will increase in the next term. The times required would be as follows:
- Less than 5%: 30 days
- 5-9.99%: 60 days
- 10-14.99%: 90 days
- 15% or more: 120 days
If a landlord fails to provide the proper amount of notice, the tenants’ existing lease would be extended at the current rate until the proper notice term has elapsed. As an example, if a landlord sends a 10% increase 45 days before the lease expires, the tenant could stay on for an extra 45 days after the lease expires at the old rent rate.
This is Moreno’s second major attempt at rent reform in the past four months. He first flirted with proposing a Good Cause Eviction ordinance in May. We found that idea be well-meant but near-sighted to the point of impracticality. This new proposal suffers from the same failings, and unlike its parent document it’s actually made it to the table of the city council. Continue reading Chicago’s Proposed Rent Increase Notification Law: Expectation vs. Reality
When a renter or home buyer selects their next home it’s usually a decision with a lot of emotions involved. Do you like the layout? How does the landscaping look? Will your kids be safe in that yard? Will you be able to take care of it when you get older?
In contrast, when a landlord buys a building this is generally not the case. While there may be some emotion involved it is considerably less than what comes into play when you’re actually going to live in the property with your family or friends. When a landlord buys a large building it is a financial investment. As one of my mentors once said, “Home buying is 10% logic justified by 90% emotion, but commercial investments are 10% emotion justified by 90% logic.”
Experienced landlords and renters will have very different perspectives on the same building. It’s my opinion that these opposing viewpoints lie at the heart of a lot of landlord-tenant conflicts. So today in the interest of learning about how the other half shops for buildings we will dip a toe into the thought processes of how a landlord goes apartment hunting. Don’t worry, I’ll be starting off easy without too much math or economics. Continue reading Landlord Logic: CAP Rates