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Renting To Illegal Immigrants

June 27, 2010 by Rob Greco · Leave a Comment 

With all the talks around illegal immigration in combination with the real estate market there seems to be new questions arising daily.  As Property Solutions continues to invest in the real estate market we find ourselves learning on a daily basis.  One of our most recent education endeavors surrounded the illegal immigration topic as we have begun investing in Carpentersville Illinois which does have a high Hispanic population.

From our perspective this market is appealing as compared to 4 years ago, we are now gobbling up properties $0.50 on the dollar or less.  This makes for great rental cash flow and an even greater deal when the buyers market we are currently in turns into a sellers market. 

Because our exit strategy won’t take place for a few years on these propertis, we need to rent these homes out to get some cash flowing in.  Due to the real estate market and the demographics we have had a few interesting discussions internally.

Naturally, you want to perform you own local market due diligence when it comes to rental pricing and demographics. What we have found in our own local market is that there is neither lack of renters nor a lack of properties waiting to be rented, including our own.  However the question arose; is it illegal to rent to illegal immigrants?

After much research the short answer is, no.  There are certain national laws such as ‘harboring’, but nothing that has been directed to landlords as it relates to renting to an illegal immigrant.  There are certain states and certain cities that have specific laws regarding illegal immigrants and we encourage you do find out for yourself or discuss with your legal representation if you need clarification.  For our purposes in Carpentersville, there are no such restrictions.

From a legality standpoint, you might be in the clear; but this is not what concerns me the most “if” we were to rent to an illegal immigrant.

With this being said, let get dig into some basic rental principals for a second.

When you find a potential renter that is interested in your property, running a background check is a must.  Well, you kinda need a social security number to run a background check…  Last time I checked, illegal immigrants do not hold social security numbers.

What this means is that you have no idea what this individual’s real name is or any criminal history they might have.  This in itself is a landlord ‘no-no’.  Sure, they might pay on time and keep to themselves.  But you have no idea if your new renter committed a triple homicide and/or has spent the past 25 years in prison outside of the United States.

I know this is a little extreme, but you would not know one way or the other as a landlord.
Let’s change scenarios a second.  What if your illegal immigrant renter has not paid the last two months worth of rent then moved out of the property without your knowledge?  Do you honestly think you will find them so you can take them to court?  Or, what if you did find them and served them a court summons?   You think John Doe illegal immigrant with a non-existent social security will show up to court?

Why not take this even further?  What if your illegal immigrant renter stole your appliances and took a hammer to all of the drywall.  I doubt the security deposit would cover the expenses.  Now what, hopefully you have one heck of an insurance agent and policy.

Sure, this is a ton of “what if’s” that will probably never happen.  But, what if they do?  As a real estate investor and landlord, you need to know the difference between risk and risky.  Each person has different qualifications that define the risk and risky level, do you know yours?

Personally, when it comes to renters; everyone over the age 18 must have a background check both criminal and non.  By no means am I saying that illegal immigrants are bad people.  What I am saying is that when it comes to business I know the difference between risk and risky.

If you ever come across the situation where you may consider renting to illegal immigrants, do what’s best in your opinion; but please do not sacrifice dollars (cash-flow) for stupidity.

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