Forest Park, Illinois

Forest Park, Illinois, located just 10 miles west of downtown Chicago, presents a unique setting for short-term rental investments. This village, characterized by its suburban feel and proximity to urban amenities, offers potential investors both challenges and advantages. The introduction of short-term rentals (STRs) began to gain traction in the area, driven in part by a series of changes in consumer preferences and the pandemic-induced shift in travel behaviors.

The local market primarily caters to travelers seeking a quieter alternative to the hustle and bustle of the city, which positions Forest Park as an attractive option for families visiting the city, workers on temporary assignments, and leisure travelers. While STRs here are not as saturated as in some larger neighboring markets, responsible investment and smart management can unlock substantial returns.

As of the latest data, the Average Daily Rate (ADR) in Forest Park sits at $190.62. This figure is crucial for potential investors as it indicates the revenue potential per rental night. Here are a few critical performance indicators to consider:

• Occupancy Rate: The average occupancy rate in Forest Park currently hovers around 65%. This reflects steady demand, although it falls short of the highs often seen in urban markets.

• Revenue per Available Room (RevPAR): With an ADR of $190.62 and an occupancy of 65%, the RevPAR calculation yields approximately $123.89, which is a good indicator of income potential from short-term rentals.

• Length of Stay: Typical bookings in Forest Park tend to last about 2.5 nights, indicating a mix of tourist and business travel.

• Market Competition: The competition level for STRs in Forest Park can be classified as moderate. There are approximately 250 active listings, with a significant number of entire homes and apartments available.

Looking back over the past decade, Forest Park's real estate market has experienced gradual appreciation. Property values have increased steadily, rising approximately 2% annually in recent years, largely attributed to its appealing suburban location near Chicago and ongoing community developments.

The STR market specifically has seen notable growth as more homeowners perceive the potential of rental income. The data shows that the number of active STR listings in Forest Park has nearly tripled over the last five years, suggesting an ongoing interest from property owners. However, this growth is tempered by regulatory developments that must be monitored closely by existing and prospective investors.

When analyzing investment potential in Forest Park, a few factors must be accounted for:

1. Cost of Entry: The average sale price of a home in Forest Park is approximately $360,000. With an expected down payment of 20%, the upfront capital required for? an investment property can be around $72,000, plus closing costs.

2. Income Generation: Utilizing the current ADR, if an investor maintains a 65% occupancy rate, the estimated gross annual income from an STR could be around $25,000. After expenses, which can range from maintenance and utilities to property management fees, net returns could see an ROI of approximately 8-10%, depending on management operational efficiencies.

3. Market Variability: Investors should remain wary of market fluctuations driven by economic conditions and local events that could impact both occupancy rates and pricing.

Understanding the seasonal patterns in Forest Park is crucial for revenue predictions and property management strategies.

• Peak Season: Late spring through early fall is the peak rental season, when families visit Chicago for vacations, and tourists explore the nearby attractions. Demand typically peaks in June and July during summer holidays, where these listings can see occupancy rates exceeding 75%.

• Off-Peak Season: The winter months see a noticeable decline in bookings, particularly during the holiday period when demand stabilizes. STR operators should anticipate a drop in occupancy rates to as low as 50% during these months.

Understanding when to adjust pricing or implement promotional offers is essential for maximizing revenue, particularly during slower months.

The performance of different property types in Forest Park varies:

• Entire Homes: These typically command higher ADRs, averaging around $210 per night. They are often preferred by families, leading to longer booking durations, which is advantageous for yield.

• Private Rooms: Generally listed between $90 and $150 per night, private rooms are more suited to budget-conscious travelers and offer more steady income if priced competitively.

Analyzing property types can help investors make informed decisions about which types to develop or acquire based on market demand and return expectations.

Recent data indicate that guests in Forest Park seek:

• Family-Friendly Amenities: Properties with multi-bedroom layouts and family-friendly features (like kitchens and washing machines) see high demand.

• Location Proximity: Being within walking distance to public transport and popular local attractions (such as parks and theaters) significantly enhances a property's appeal.

• Tech-Friendly Features: High-speed internet access and smart-home technology are increasingly non-negotiable for both business and leisure travelers.

Keeping pace with emerging guest preferences can set a property apart and enhance occupancy rates in a competitive environment.

The regulatory environment regarding short-term rentals in Forest Park is subject to city ordinances. Forest Park mandates registration for STRs, which includes operating permits and inspections. Below are a few key points:

• Licensing: STR owners must obtain a special use permit, which involves a review process that assesses property suitability for rental.

• Tax Obligations: Short-term rental hosts are responsible for collecting hotel taxes, currently set at 6.5%. This is an important consideration for pricing strategy.

• Local Zoning Laws: Investors must be aware of zoning laws that could impact the operation of their rentals and ensure compliance with any homeowner association regulations.

Navigating this landscape is necessary to maintain legality and avoid fines that can significantly impact profitability.

Forest Park is comprised of distinct neighborhoods, each with unique characteristics that can affect short-term rental performance. Notable areas include:

• Downtown Forest Park: Known for its vibrant dining and shopping scene, properties here attract more transient visitors and families seeking easy access to public transport.

• Residential Areas Near Parks: Proximity to parks can increase a property's attractiveness among families and travelers seeking outdoor activities.

• Cultural Attractions: Properties near local museums and theaters tend to perform better, as they can attract a steady stream of visitors interested in local culture and history.

The neighborhood dynamics play a vital role in influencing occupancy rates and should be factored into any investment considerations.

As Forest Park continues to grow, several trends are emerging that investors should monitor:

• Increased Investment in Local Infrastructure: Planned improvements to public transport and local amenities could attract more visitors and affect demand for rentals positively.

• Sustainability Practices: Eco-conscious travelers are on the rise, and properties that highlight sustainable practices may appeal to this demographic.

• Remote Work Influence: With the normalization of remote work, Forest Park could attract professionals seeking longer stays, thus necessitating a shift in the property management approach.

Investors should remain adaptable, regularly reassessing their strategies in alignment with market changes so as to capitalize on evolving trends.