Experience renting to undocumented immigrants?

Question

Hi BP Family,

My lovely unit in the Hermosa neighborhood has been receiving a lot of attention from undocumented immigrants. I normally would run credit scores and require a certain income but I would also like to make a move to a family or couple that will make this place their home.

What strategies do you use to filter people if they aren't legal?

Thanks!

Henry Lazerow · Answer

Undocumented immigrants can make great tenants but need to provide several references from past landlords or/and someone else to guarantee the credit. Sometimes undocumented immigrants will live in the same rental for 10+ years as it's difficult for them to move so you end up with very little turnover costs, most also won't go calling the city on you for minor things as aren't here legally themselves and tend to want to avoid any conflicts.

John Warren · Answer

@Afrothiti Manolis I look at the 3X the rent criteria as a group effort. If one person makes 3X the rent and the job is verifiable and solid (not likely to end, etc) then you are set there. I also look at credit as a group effort. Personally, I have had plenty of luck renting to couples where one person had above 600 credit and the other did not. Not everyone feels this way, but if you have enough C class rentals you start thinking in terms of overall risk versus extended vacancy.

John Warren · Answer

@Afrothiti Manolis I run into this fairly often on my rentals in Cicero. I personally treat all tenants the same which is the best way to stay out of trouble. I do require at least one of the tenants to meet my minimum credit requirement, so if none of the group has a credit score I will not rent to them.

With that being said, I have had some good experience with legacy tenants that I suspect are undocumented. I have three apartments in one of my Berwyn buildings where we are on our third lease with these tenants and they have been great. I also have had terrible experiences with legacy tenants, which just proves that screening incoming tenants is so important!

Andrew Holmes · Answer

Rather than documented/undocumented Issues just see if they have someone that can be guarantor with credit.  Basically an additional signer. Most people have family or friends That can sign. Regardless of immigration status if someone has credit That does not meet our standards then we require an additional cosigner.

Crystal Smith · Answer

When you say filter people, do you mean to exclude people who do not meet your requirements? If that's the case then the easiest way to filter people is to have your requirements in writing and included with all of your marketing for the property. For example: If you have a minimum credit score requirement then it should be stated as part of your marketing. Those with no credit shouldn't be calling, which would include foreign nationals (I don't use the word illegal). If you want to include foreign nationals with no credit history you could then add something into the marketing that foreign nationals are acceptable if they meet your minimum income requirements and get a co-signor with a credit history.

Afrothiti Manolis · Answer

@Crystal Smith I really appreciate your contribution to my question. Thank you for being helpful!

Crystal Smith · Answer

The guidelines we use: We run credit on everyone and look for at least one of the household (primarily the breadwinner) to meet our minimum credit requirement. The income requirement is from the combined household, not one member. In your scenario, the potential tenants would meet our income requirement because the combined household income exceeds 3x the rent, but with the primary $ person being at 620 credit score, we'd evaluate their Debt to Income Ratio. What's their monthly payment on debts. If the ratio is too high then we would ask for a co-signor. If the current ratio is low then we would conditionally approve the applicant pending the criminal background check.

Afrothiti Manolis · Answer

@Crystal Smith@John Warren This is helpful, thank you. I'm running into a situation: what if one members income meets the 3x rent but has a credit score of 620 while the other member makes 1x rent with a 720 credit score... they mention they have strong co-signers too but this is a first time for me so would love your advice.

Crystal Smith · Answer

We look for 3x the rent.

Afrothiti Manolis · Answer

@Henry LazerowI have had similar experiences with other tenants that have resided in buildings I bought before I bought the buildings. It's a new experience for me to actually look for tenants on my own! What are some requirements you look for?

@Aaron ZimmermanAgree, thank you!

@Crystal Smith Yes, thank you for this, " minimum income requirements and get a co-signor with a credit history." I appreciate it! WHat do you look for income requirements? 2x rent or?

Experience renting to undocumented immigrants?

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