Illinois Rental Property Calculator & Real Estate ROI

Investor guide

What rental investors should know about Illinois

Illinois — and greater Chicago especially — is a real cash-flow market, with entry prices well below coastal metros and strong long-term tenant demand. The two things out-of-state investors have to underwrite carefully are Illinois's very high property taxes (second-highest effective rate in the country) and, if you buy in Chicago, the Chicago Residential Landlord and Tenant Ordinance (RLTO), which is significantly stricter than state law and can turn minor security-deposit paperwork mistakes into five-figure lawsuits.

Key Illinois costs for landlords

• Property tax: Illinois has the second-highest effective property tax rate in the US at around 2.08% of market value — well above the ~1.1% national average, and often the largest single expense in your Cap Rate calculation, especially in Cook County. Pull the specific parcel's actual tax bill before finalizing NOI.
• No rent control: Illinois state law prohibits rent control statewide, so there is no cap on how much you can raise rent at renewal. Proper written notice (typically 30 or 60 days depending on tenancy length) is still required, and Chicago landlords must additionally follow the RLTO notice rules.
• Chicago RLTO risk: Inside Chicago, the RLTO requires security deposits to be held in a separate, federally insured, interest-bearing Illinois bank account, with annual interest paid to the tenant. Violations of RLTO security-deposit rules carry a penalty of double the deposit plus the tenant's attorney fees. Chicago landlords must also give at least two full days' notice before entering a unit (not the 24 hours common elsewhere). This applies inside Chicago city limits only.

Frequently asked questions (Illinois real estate)

What Chicago Residential Landlord and Tenant Ordinance (RLTO) rules should out-of-state investors know before buying?

Chicago's RLTO is significantly stricter than Illinois state law and catches out-of-state investors off guard. Security deposits must be held in a separate, federally insured, interest-bearing Illinois bank account, and landlords must pay annual interest on deposits. Violations of the RLTO's security-deposit rules carry a penalty of double the deposit plus the tenant's attorney fees — turning minor paperwork mistakes into five-figure lawsuits. Chicago landlords must also give at least two full days' notice before entering a unit (not the 24 hours common in other markets). This is a Chicago-specific risk that does not apply statewide, but it is one of the biggest reasons out-of-state investors get burned on their first Chicago rental.

How high are Illinois property taxes for rental investors?

Illinois has the second-highest effective property tax rate in the United States, around 2.08% of market value — well above the roughly 1.1% national average. Cook County in particular runs high, and the tax bill is often the single largest driver of whether an Illinois rental deal actually cash-flows. Always pull the specific parcel's most recent tax bill (not just a county average) before finalizing your NOI and cap rate.

Is there rent control in Illinois?

No — Illinois state law prohibits rent control statewide, so landlords are not capped on how much they can raise rent at renewal. Proper written notice is still required (typically 30 or 60 days depending on tenancy length), and Chicago landlords must additionally follow the RLTO's notice rules. The lack of rent control makes Illinois more landlord-friendly on pricing than states like California, Oregon, or New Jersey.