Renting Without A Lease.
Been looking at a six unit building on the Southside of chicago...the building is located in a Latin neighborhood. The owner says that he rents to predominantly Mexican families with questionable legal status..because of this he doesn't/ can't run any kind of credit checks or sign any leases. They prettly much rent paying cash on a month to month basis with no signed agreements..I talked to 2 other building owners in the area and they both relayed similar info.. They told me that many of these families are hardworking and usually pay the rent on time but a majority are afraid of signing any kind of lease agreement or have any kind of credit checks run on them...Both owners have told me that if I required a signed lease agreement and or a credit check, it would be very difficult to rent the apartments if not impossible...
Personally I find it somewhat uneasy to rent units with no leases or credit checks. What are your thoughts on this matter?
State law will dictate the law when a written rental agreement is not used; in view of this, a lease, in my opinion, is not absolutely required. I'm sure this investment looks great on paper, but by the time the end of the month rolls around, my guess is the number of hours you will spend collecting rent and getting rid of non-payers will absorb more time that anyone can imagine.
If you are prepared to manage this property on a daily basis; you should be able to do quite well; however I suspect any upstanding management company would refuse to operate in the "wild west".
An Oral Lease is worth the paper it is written on. Oral Leases are bad because you and the tenant don't have a common ground.
I have a property that is full of mostly Mexicans. I assume many of them are illegals but don't know for sure, nor do I really want to know.
I do have a signed lease with each tenant, but don't do a credit or background check. I verify employment to know they will have some money to pay the rent.
As far as renting to an illegal, I look at it this way. It is illegal to discriminate on race, religion, etc., etc., . Your probably more likely to get in trouble for not renting to an illegal for discrimination then you are for renting to them.
So far I have had great luck with these tenants. They are hard working men/families trying to better their situation. They are very respectful of me and my property and always pay rent on time with cash. Lets hope my luck keep holding out!
before you invest in COOK COUNTY. be aware of the favorable laws for tenants. COOK COUNT, known as DALYLAND is not to favorable toward landlords. See www.IRPOA.ORG.
Mexicans pay cash, are hard working and clean. It's up to you, can you evict without a lease? Who would you say is late?
Good Luck
Jay
Well I am curious about who is going to manage your all-cash-rents six flat while you are in AZ.
My experience renting to Hispanics is that they won't have any difficulty signing a lease which does make life a little easier if you have to evict. But I've never had to evict an hispanic tenant.
South east side or South west side?
Actually I am originally from Chicago...but I am Temporarily her in AZ for work...I ended up buying a house out here that has skyrockted in value. I intend to move back home to Chicago this July after I've had this house for 2 years to avoid the capital gains tax. Then I plan to sell the house and use the proceeds to invest in a 4-6 unit building..
Been looking at the Pilsen/ Little village area...My soon to be father in law owns a few buildings in those two areas and knows the neighborhood well. On a recent visit he introduced me to several other owners in the area and I got good feel for the area...Though parts of pilsen/university village are overpriced and many of the listings are asking outrageous prices, there are still many building owners in the area who have not listed their properties on the MLS