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Author: Mark Ainely | Partner GC Realty & Development & Co-Host Straight Up Chicago Investor Podcast
I’m back with Tim Harstead for week three in a row of these Chicago Landlord Secrets lives, and we joked that we officially made it past the “New Year’s resolution drop off.” Tim even called out how people start falling off around that third Tuesday, so we’re taking that as a win.
Vacant units in winter can cost you thousands just to save a few dollars
Tim opened with a situation that happens way too often: a burst pipe in a unit they just took over.
The key detail was brutal. The unit was vacant, and it looks like the owner didn’t have power or gas on to save money, but the building still had water because tenants upstairs were living there. They walked in and found a busted pipe, plus carpet damage.
That led into the bigger lesson we both see all the time: people try to save a little money upfront by not keeping heat on in a vacant unit, and then they end up spending thousands when winter hits.
I shared two versions of the same story from our side too:
- We show up to take keys after telling an owner multiple times to move utilities back into their name, and the neighbor is outside saying water has been flowing into their house for 29 hours.
- We manage a four flat in Logan Square where one unit was kept vacant for an FHA buyer, heat never got turned on, the broker was handling it, and we ended up dealing with a burst pipe anyway.
I also said it directly: even if someone else should have handled it, we should have stopped by and checked. That’s extreme ownership. We got lucky with minimal damage, but it’s a real risk every winter, whether you’re a landlord, a flipper, or just “Aunt Sue selling a house that’s empty.”
Squatters are still a major problem, and vacant properties need more protection
Tim brought up something I agree with 100% and keep repeating because it’s not optional anymore: vacant properties need utilities on and they need an alarm system, especially depending on the area.
He talked about portable alarm systems like the Simply Safe type setups that are cheap now, and the reason wasn’t just prevention. It was documentation.
What Tim is seeing with CPD is that they want proof the people inside are squatters and not tenants. The more documentation you can bring, the better your chances of getting real help from the police.
Tim shared an update on a squatter situation they’ve been stuck in since late November. Normally they would have filed eviction immediately, but eviction is eight months, and they were close to the new law starting in January. They also didn’t want to put the squatters on alert until they knew how the new process would work.
Then something interesting happened: the neighbors complained to the police and called them squatters, and CPD reached out to Tim directly. CPD told them what to bring, including the deed and a copy of the leases they use. Tim’s plan is to bring everything over and hopefully have a good outcome next week, plus real guidelines for other owners.
I mentioned the Roseland story that made the news where the owner eventually got their home back, and the squatter got arrested on multiple counts. My bigger point was I’m grateful anytime CPD actually takes action, because officers are taking a risk, and they get punished way harder in the press for a mistake than they get praised for doing the right thing.
Leasing syndication is a big advantage, but you still need to check the big sites
I brought up a conversation I had with someone who didn’t really understand leasing marketing. A lot of landlords throw a unit on Zillow and think they’re everywhere, but they’re really limited to a few channels unless they’re using software that syndicates.
I explained it as simply as possible: you should only have to post once, maybe twice if you add MLS, and then the listing syndicates out to a ton of sites.
Tim’s take was spot on. Because they syndicate, he can rattle off a hundred sites, but they’re probably on a thousand. The caveat is you still need to double check the big ones, because syndication isn’t perfect. He gave a real example where a listing popped up saying they required a security deposit, even though they do move in fees, and they had to log in and fix it.
Rental rates are normalizing, and the market is not going to let us keep pushing forever
I shared that in our leasing data, we saw a trend in 2025 where it started taking longer to lease units in the second half of the year. I pulled 2024 data too because I want to see if that trend started earlier.
My belief going into 2026 is that rent increases are going to cap off. I think we’ve been trying to push rents, and I don’t think we can push them as high as some people think we can this year. When that happens, market time gets longer.
Tim broke it down in a way I agree with:
- A 5% increase is normal.
- In 2021 and 2022 we saw 10%, 20%, even 25% rent increases in some places, and that isn’t sustainable.
- In some areas, we overshot the market, so now we’re seeing decreases or normalization.
- He said he’d rather overshoot and make more money for two years than undershoot, but now we have to deal with reality and price things to rent faster.
Renewal rates tell you a lot, and 90% to 100% renewal is not always good news
I shared our renewal rate: 72% renewed.
Then I pushed Tim a little because this is the part landlords overlook. A strong renewal rate can mean a strong market, good housing providers, or lack of inventory, but it can also signal you’re under market if it’s too high.
Tim gave a simple rule I like: if you’re renewing 90% to 100%, your prices are way too low. He talked about the frog in boiling water example. If you keep rent increases small and steady over time, you keep up with inflation and taxes. If you hold rent flat for five years and then try to jump all at once, the resident leaves, and now you have vacancy and turnover costs.
He also tied it to maintenance. If you do upkeep every year, turnover might be paint and minor work. If you ignore systems and defer everything, the move out turns into a $30,000 to $40,000 rehab just to make the place rentable again.
Another important point he made: some residents are not good residents, and you do not want to renew everyone. If someone is always late, they’re often one real life problem away from missing a full month, and then you’re in a much worse situation. Sometimes the smartest move is non renewal, even if they made it through the first year.
Month to month is not the easy exit people think it is
I brought up a pattern I keep seeing online: landlords saying, “My resident is late two months, but their lease ends next month, what should I do?”
My reaction is always the same. If they’re bold enough not to pay rent, they’re bold enough not to leave just because the lease ends. People act like the end of the lease is a magic switch.
I also shared a tip I literally just recorded for a podcast episode: month to month does not save you from court pain. Whether you have a month to month lease or a 10 year lease, if you have to go through the court system, you’re dealing with the same headache. And on a human level, a lease creates commitment, which can actually lead to better resident behavior.
Tim added something that matters a lot in Cook County and Chicago: depending on how long they’ve been there, you still have long notice requirements. So the month to month idea is not month to month in practice.
Fair notice timing matters, and most people misunderstand what 60 days really means
We talked through how notice really works.
I gave an example using February 4th. If you serve notice after the first of the month, the timeline doesn’t just end 60 days later on a random date. It effectively runs through calendar months.
Tim explained it clearly: it’s not really 60 days and 120 days the way people think. It’s two full calendar months and four full calendar months, with day one starting on the next first of the month.
We also touched on the rent increase side of the same rule. If you raise rent and you don’t give proper notice, the resident can get extra time at the old rent on top of it. That mistake can get expensive.
Selling a property can create collection problems if you are not serious about selling
Tim asked if we see residents get harder to collect from when a property goes up for sale. I said we don’t see it as much in some suburban cases because we sell off market sometimes, we don’t always put signs out, and in certain areas notice requirements are looser. But I admitted we have seen it on the south side.
Tim explained why it happens. Residents know the owner doesn’t want a balance showing during a sale, so they assume they can negotiate. His warning was for owners who test the market without being serious. If you list something at a fantasy price just to see what happens, there can be negative effects: harder renewals, harder collections, and residents feeling unstable.
On the flip side, I said something I think is important. A lot of residents get scared when they hear a property is being sold. They think they’ll get kicked out immediately. Many don’t realize the lease runs with the property. You can sell it multiple times and the lease is still valid. If a resident gets wind of a sale, I try to have a straight human conversation so they understand they’re not getting thrown out just because ownership changes.
Security deposits on inherited residents and how I’d handle it
We ended with a question from Denzel that comes up often: he inherited a resident, the previous owner took a security deposit, and the lease is ending. Can he return the deposit and start a new lease without one so he’s not responsible?
I said yes, and I also said the best time to handle this is before closing, making the seller return it so you inherit the resident with nothing. Then you can renew with either no deposit or a non refundable move in fee.
Tim added something I agree with. Security deposit liability and claims can get gray. If you return it, get something signed that acknowledges the handoff and clarifies responsibility up to that point, then set clean terms going forward.
We also talked about the security deposit interest rate, and I admitted a dumb early mistake I made. When I first started investing, I tried to beat the system and aggressively paid interest, and I moved the decimal wrong. I was handing out $10 and $15 checks instead of 10 and 15 cents. Nobody complained, of course.
Timestamped show notes
- 00:33 Week three of Chicago Landlord Secrets and sticking past the drop off
- 02:24 Taking over a new property and finding a burst pipe immediately
- 03:21 The costly mistake of leaving heat off in a vacant unit
- 04:43 Another burst pipe story in a Logan Square unit that was for sale
- 05:44 Why vacant properties need utilities on and why alarms matter
- 06:52 Working with CPD on a squatter situation and what proof they want
- 10:01 Leasing syndication and why posting once should cover everything
- 11:24 Why rent increases are normalizing and overshooting catches up
- 15:06 Renewal rates, what they signal, and why 90% to 100% can mean under market
- 20:14 Month to month requests, pricing the flexibility, and winter cycle timing
- 23:08 Why lease ends next month does not solve nonpayment problems
- 25:14 Month to month leases don’t avoid court pain and can hurt commitment
- 27:15 Cook County and Chicago notice realities and why month to month isn’t truly month to month
- 29:21 Why residents hate early renewal conversations even though the law protects them
- 33:48 Selling a property can create collection issues if you’re not serious
- 35:06 Reassuring residents that leases run with the property
- 38:14 Returning inherited security deposits and starting fresh on renewal
- 40:49 Security deposit interest and my decimal mistake
Takeaways for Chicago landlords and property managers
- In winter, a vacant unit without heat can turn into thousands in repairs fast.
- Utilities on in vacant units is not optional if you want to avoid pipes, damage, and chaos.
- Alarm systems are useful for prevention and for proof when squatters become a police issue.
- Syndication is powerful, but always verify the big listing sites for errors.
- Rent increases are normalizing, and pushing past the market creates longer leasing times.
- Renewal rates are a signal, but too high can mean your rent is under market.
- Month to month is not a shortcut, you still have notice requirements and court pain.
- If you sell, be serious, and communicate with residents so they don’t panic about losing their home.
- If you inherit a security deposit, clean it up on renewal and get signatures so liability is clear.
Guest Information
Mark Ainley
Founder & Partner – GC Realty & Development
Podcast Co-Host – Straight Up Chicago Investor
Tim Harstad
Founder – Chicago Style Management
Because finding good tenants and property management shouldn’t feel like online dating.
Dear Investor,
If you are an investor in either the city or suburbs of Chicago, I would love to speak with you about how we can help you on your real estate journey. At GC Realty & Development LLC, we help hundreds of Chicagoland real estate owners and brokers each year manage their assets with both full service property management and tenant placement services.
We understand that every investor’s goals are unique, and we love learning about each client’s individual needs. If there is an opportunity to help you buy back your time by managing your rental property or finding quality tenants, please check us out.
Best Investing,
Founder, Partner, Podcast Co-Host, and Investor
