Illinois Rental Portfolio Guide
What you need to know before building or growing a rental portfolio in Illinois — property tax burden, state income tax, security-deposit rule, source-of-income law, and the metros that actually cash-flow after accounting for local taxes.
Tax burden on Illinois rentals
Property tax
2.08%
effective rate on median home value
At 2.08% effective, this is one of the highest property tax burdens in the country (rank 50 of 51). Every underwrite needs to account for the full carrying cost — even a strong rent-to-price ratio can go negative once property tax is properly modeled.
State income tax
4.95%
top marginal rate
A top marginal rate of 4.95% is moderate. Portfolio income above the federal deduction stack still faces this rate on top of federal, so tax-optimized holding structures (installment sales, 1031s, cost-segregation) matter more here than in no-tax states.
Security deposit rule
No statutory cap on security deposits. Landlords set the deposit at whatever the market accepts — typically one to two months' rent, sometimes more for higher-risk applicants or pets. Local ordinances may still apply.
Deposit rules change; verify current statute before drafting a lease.
Best cash-flow markets in Illinois
Modeled monthly cash flow on a median-priced single-family purchase at 20% down, 30-year fixed, using Illinois’s 2.08% effective property tax rate plus 25% of rent for insurance, maintenance, vacancy and management.
| Market | Median price | Median rent | Annual property tax | CF / month |
|---|---|---|---|---|
| Danville, IL | $99,458 | $891 | $2,069 | $-26 |
| Galesburg, IL | $119,882 | $861 | $2,494 | $-190 |
| Decatur, IL | $126,931 | $928 | $2,640 | $-190 |
| Peoria, IL | $172,742 | $1,179 | $3,593 | $-321 |
| Carbondale, IL | $154,421 | $896 | $3,212 | $-405 |
| Quincy, IL | $187,232 | $1,197 | $3,894 | $-409 |
State median across the metros: $172,742 home, $1,108 rent, $-432/mo modeled cash flow.
Track your Illinois rental portfolio
The Pro Portfolio Tracker rolls up every property in your portfolio, auto-revalues them monthly against local price data, and flags DSCR risk and equity milestones. Each Illinois property carries the state-specific tax burden shown above through to the cash flow calculation.
Property tax rate: Tax Foundation. Security deposit rule: state statute. Verify current law before making decisions — statutes change and this page is a planning reference, not legal or tax advice.