Immagrants as tenants

[David Tang]

Hey BiggerPockets Community, 

Me and my wife are new to real estate and just recently bought a legal 2 + BSMT unit in Chicago. We were reached out to by a migrant housing group member asking if we would house a immigrant member/family/etc. where the nonprofit would provide a 12 month stipend to cover for the "whole" lease. Anyone who has rented out to immigrants before, thoughts on considering this? Something we are currently cautious of is since this would be our first tenant, we are taking on an additional amount of risk due to credit & background would be unknown. Any insights would be greatly appreciated, especially if you have accepted the same or someone in a similar situation as a tenant.

[Brie Schmidt]

Quote from @David Tang:

Hey BiggerPockets Community, 

Me and my wife are new to real estate and just recently bought a legal 2 + BSMT unit in Chicago. We were reached out to by a migrant housing group member asking if we would house a immigrant member/family/etc. where the nonprofit would provide a 12 month stipend to cover for the "whole" lease. Anyone who has rented out to immigrants before, thoughts on considering this? Something we are currently cautious of is since this would be our first tenant, we are taking on an additional amount of risk due to credit & background would be unknown. Any insights would be greatly appreciated, especially if you have accepted the same or someone in a similar situation as a tenant.

 There is a variety of city programs and charities right now offering assistance for migrants.  A few law passed this year that adds immigration status as a protected class so you can not deny them solely based on their status.  I do volunteer work for refugee community connection and I know there is a great need for housing right now

[John Warren]

@David Tang we manage several hundred units now in the Berwyn and Cicero area, so we have quite a few tenants who are undocumented. When we place any undocumented tenants, we focus on two things. We want to know what type of job they have and how long they have it. Their source of income is critical as they have no backstop (sick days, health insurance, etc). We also want to speak with personal references from the community who know them and will vouch for them. Preferably this would not be relatives, but would be employers, church leaders, community organizations, etc. 

I would not prioritize the 12 months of "guaranteed" rent. I would make sure you have a tenant who is either employed or on the way to employment very quickly and who is rooted in the community. 

[Colleen F.]

@David Tang Unless there is an employment component of this program I would not do it. Especially if this is your first rental. Check the Chicago laws to see what your  options are as far as saying no.  Some cities have no problem putting landlords in a bad spot should a tenannt not pay the process of eviction in your area I don't believe is short.

[David Tang]

Appreciate all of the insights so far, I asked the volunteer for more information. Haven't heard anything yet so this may not even proceed any further, but still valuable information.

[Jonathan Klemm]

Hey there @David Tang - I actually didn't ever hear of a program that was offering a 12 month stipend...someone I know did it back when it was 6 months and now my understanding was a 3-month stipend with a potential renewal for 3 months.

We have wanted to use the Chicago program ASERAP (happy to share their contact info), but fall in line with others regarding employment...the most important thing is income to pay after they move-in because if you get into a sticky situation down the road the upfront rent won't matter.

Definitely following this thread to see if anyone has placed migrants and understand what they did for income requirements.

[Nathan Gesner]

This is an interesting - and widely ignored - issue.

Everyone complains about the lack of housing in our country. Politicians and media seem to blame vacation rentals, but my math points to illegal immigrants.

There are approximately 43 million rentals in America. Vacation rentals make up less than 3% of all rentals, but seem to take all the blame for our housing shortages. Meanwhile, we have over 15-20 million illegal immigrants housed in this country. I conservatively estimate illegal immigrants are occupying at least 3% of rentals in our country, twice as much as vacation rentals.

Supply is low, which increases demand. Demand drives prices up. Citizens complain they can't afford rent and our politicians blame vacation rentals or second homes that sit vacant most of the year.

[Henry T.]

Have high screening requirements and stick to them. 720 credit. Two years on present job. Verifiable income 3x rent. Praise from previous landlord(not current). etc.  I don't consider Chicgo as a landlord friendly city, be careful. Screening for a good reliable tenant is your most important step, don't blow it.

[Cory St. Esprit]

We rent out one of our units to a family from Venezuela (documented and in US legally on temporary visa). Granted, we knew them from our time spent living in Latin America...but it's been a wonderful experience. Some of the hardest working folks I ever met. 

[V.G Jason]

Quote from @Nathan Gesner:

This is an interesting - and widely ignored - issue.

Everyone complains about the lack of housing in our country. Politicians and media seem to blame vacation rentals, but my math points to illegal immigrants.

There are approximately 43 million rentals in America. Vacation rentals make up less than 3% of all rentals, but seem to take all the blame for our housing shortages. Meanwhile, we have over 15-20 million illegal immigrants housed in this country. I conservatively estimate illegal immigrants are occupying at least 3% of rentals in our country, twice as much as vacation rentals.

Supply is low, which increases demand. Demand drives prices up. Citizens complain they can't afford rent and our politicians blame vacation rentals or second homes that sit vacant most of the year.

 Vacation rental owners likely vote one way, the illegal immigrants that can vote-- vote the other way. 

The top partner at my previous workplace mentioned this back 15-18 months ago; illegal immigration will be the new divisive factor in the parties. Not to get political, but it's very interesting to see what it's doing in specific areas. 

[Adam Martin]

This isn't something I would be willing to do because there is no way they pass my screening criteria and everyone must pass no exceptions.  The guaranteed rent for a year is nice but what are you going to do when the year is up, they are already here illegally in the US so I would be hesitant to believe they would follow the law on property rights and voluntarily leaving when the time comes.  I agree with @Nathan Gesner that the migrant issue is fueling the fire on the affordable housing crisis, more people needing them has to drive scarcity.  I read another article about squatters recently and this is what really worries me.  Just wait until they figure out adverse possession laws and how long you can drag those out with really no consequences at the end other than having to just move onto the next victim.