Risks & Rewards Ff Renting To Undocumented Immigrants | Blog (2023)

Ready for a pragmatic look at the pros and cons of leasing to undocumented immigrants? Dollars and cents, risks and benefits, not rhetoric or opinion-mongering?

Now that there are only a third of us still in the room, let’s talk about a few practical realities. There are 11-11.5 million undocumented immigrants in the United States, and they aren’t homeowners. Let’s face it, it’s hard enough to qualify for a mortgage even when your documents are in order!

So they rent, which raises all manner of questions. Who’s renting to these undocumented immigrants? What kinds of tenants are they? Are landlords even allowed to knowingly sign leases with them? What risks do they pose, and why would landlords lease to them?

Because of the undocumented nature of these renters, some of the evidence is, necessarily, anecdotal. But where government statistics are scarce, we’ll apply single-step logic, anecdotal evidence and common sense. What we won’t apply is politics, so check them at the door and read on.

First of all, is it even legal to rent to undocumented immigrants?

That, dear readers, depends entirely on where your property is.

State laws range from emphatically pro-immigrant to aggressively anti-immigrant. Consider California and New York, where it’s not legal to even ask a rental applicant about their residency status.

On the opposite end of the legal spectrum, it’s a felony in Oklahoma for landlords and property managers to provide housing to undocumented immigrants. The law is pretty explicit: “It shall be unlawful for any person to conceal, harbor, or shelter from detection any alien in any place within the State of Oklahoma, including any building.”

Double check your state’s laws because a wrong move in either direction could land you in court depending on your state’s leanings.

Risks & Rewards Ff Renting To Undocumented Immigrants | Blog (1)

Fair Housing laws get tricky when immigrants are involved.

The Department of Housing and Urban Development (HUD) does not have a sense of humor or leniency when it comes to Fair Housing laws.

Quite the opposite: They’ve been aggressively pursuing Fair Housing lawsuits in recent years, trying to make examples of landlords around the country.

As a refresher, landlords and property managers cannot discriminate on the basis of race, national origin, or ethnicity (among other factors less relevant to immigration). But it turns out that “discrimination” is not so easy to define. For example, earlier this year HUD issued a ruling that landlords cannot have a blanket policy barring all applicants with a criminal record. The logic? That it violates Fair Housing laws based on race.

Related: The 5 Areas Where People Violate the Fair Housing Act The Most (And How to Avoid Them!)

Gray areas in HUD’s interpretation of the laws abound. If you only post rental ads in English on a community board frequented by white Americans, but the city has a large Hispanic population, is that discrimination? If you require all rental applicants to pass an identity verification, is that discrimination?

But here are a few rules that are crystal clear, black and white: If you require certain documentation of one rental applicant, you must require it of all applicants. If you run certain background checks on one applicant, you must run the same checks on all applicants. There is no room for different requests, documents, or screening actions.

Have a comprehensive tenant screening procedure, and stick to it for every applicant. No exceptions.

What are the challenges in screening &leasing to undocumented immigrants?

Captain Obvious here: Undocumented immigrants are not documented on paper.

That means no credit report, no criminal background, no eviction history — at least theoretically. Sometimes there is a paper trail, using a false identity and Social Security Number.

So how can you know as a landlord or property manager if the applicant will make a good tenant or not? In many ways, it’s like leasing to a recent graduate, with no credit history or track record. One option is requiring a co-signer if you have an applicant whoseems promising based on income, employment and housing history, but has little or no credit.

The language barrier can pose another challenge. Many undocumented immigrants have limited or no English, which means you’ll need a translator if you don’t speak their native language.

And what of the lease agreement? In some states (e.g. California), landlords are legally required to provide a copy of the lease in whatever language was used to negotiate lease terms. Do you know where to get a California lease in Lithuanian? I don’t. That means hiring a translator to draft a copy of your lease in your tenant’s language.

Lastly, there are plenty of anecdotal accounts of undocumented immigrants packing many occupants into one rental unit. It makes intuitive sense, for several reasons. First, it is more difficult for undocumented immigrants to find housing, with no papers and no background on paper. Second, undocumented immigrants earn less income than legal residents, given the fewer job options available with no papers.

More occupants mean more wear and tear on the property — and higher repair and replacement costs for landlords.

Risks & Rewards Ff Renting To Undocumented Immigrants | Blog (2)

What are the challenges in evicting &collecting if undocumented immigrant tenants don’t perform?

Here’s a conundrum: If you leased to an undocumented immigrant in a state where it is a crime to do so, what happens if you need to evict that tenant? How readily would you file in court for eviction?

Or, in states where it’s not a crime to lease to undocumented immigrants, how do you collect unpaid rent or damages from someone who doesn’t exist on paper?

Brian Pendergraft, lead attorney and landlord-tenant specialist at The Pendergraft Firm, explains further: “If I get a judgment against an American citizen for unpaid rent, then I can find where they work and garnish their paycheck, find where they bank and garnish their account, and use every tool in the toolbox to go after their assets. And it is hard enough to collect a judgment from an American citizen.”

But undocumented immigrants? “The problem with renting to undocumented immigrants is that if they do not pay rent, chances are they are ‘judgment proof.’”

What are the benefits to renting to undocumented immigrants?

With all these challenges, why would any landlord take the risk on undocumented immigrants?

It turns out there are some compelling reasons.

First, undocumented immigrants don’t want to rock the boat. The last place they want to end up is a courtroom, which means they’re more likely to pay the rent. And because there tend to be more occupants in the rental unit, there are more income earners to cover rent payments if one occupant loses their job.

If the tenants did default on the rent, they aren’t likely to stick around for the eviction process. The last thing they want is appearances on court dockets, sheriffs showing up at the door, etc. Thismeans they’re likely to “skip” and simply move out without forcing you to go through the entire expensive, time-consuming eviction process.

Related: 7 Advanced Tenant Screening Tips (So You’re Not Fooled by Wolves in Sheep’s Clothing)

They’re also far less likely to sue you, for the same reasons. There’s nothing worse for landlords’ returns than a lawsuit.

And you know those tenants who are constantly calling you to complain and demand property upgrades and improvements? Undocumented immigrants aren’t exactly keen to have a bunch of contractors and strangers tromping through the property all the time. Anecdotal evidence is that undocumented immigrant tenants minimize their contact with the landlord and will even make minor repairs themselves when something breaks.

Finally, some landlords report that undocumented immigrants will stay in the property longer than typical tenants because of the difficulty posed by finding new housing without papers. Longer tenancies mean lower turnover rates — great news, because turnovers are deadly to landlords’ returns.

Should you rent to undocumented immigrants? Maybe. Understand your state’s laws, explore your market’s demographics, decide what your priorities are as a landlord. There are risks that come with renting to undocumented immigrants, but there can also be benefits, especially for hands-off landlords looking to create rental income that’s more passive.

[Editor’s Note: We are republishing this article to help out our newer readers.]

Have you ever rented to undocumented immigrants? Why or why not?

Share your experience with other landlords, so they can benefit!

Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.


Is it safe to travel if you are undocumented? ›

A person without lawful immigration status could be detained, placed in removal proceedings, or removed from the country if the person has an outstanding order of removal. Traveling within the U.S. has some risk associated with it, and the level of risk depends on a person's individual case.

Can undocumented immigrants rent an apartment in Illinois? ›

SPRINGFIELD, Ill. (WTVO) — Starting January 1st, 2024, Illinois landlords will be required to rent or sell property to undocumented migrants. The law adds immigration status as a protected class in the Illinois Human Rights Act.

What are the struggles of undocumented citizens? ›

In extreme cases, some undocumented youth become so hopeless that they turn to suicide. The detention and deportation of their parents/caregivers can be devastating. Losing their support system severely undermines their potential for future success.

Can undocumented immigrants rent an apartment in NYC? ›

Landlords cannot: Refuse to rent an apartment because of someone's immigration status, nationality, or religious beliefs. Post advertisements stating that certain types of tenants, such as immigrants or people from certain countries, are unwelcome.

Can undocumented immigrants travel inside the US? ›

However, if a passenger does not possess a Real ID, there are other forms of identity that will be accepted. This list includes US passports and permanent residence cards. Undocumented immigrants may therefore be able to fly domestically as long as they hold an approved form of identification on this list.

Can undocumented immigrants get a green card? ›

Provided the immediate relative had a lawful entry to the U.S., he or she may adjust status to permanent resident. In other words, an undocumented immediate relative may generally apply for a green card from inside the United States. The lawful entry is essential.

Can an illegal immigrant rent an apartment in the US? ›

1. Can a landlord refuse to rent to me because I'm undocumented? NO. Federal law prohibits denying housing to someone because of their race or the country they were born in, even if the discrimination is unintentional.

Can a non US citizen rent an apartment? ›

You do not have to be a citizen to rent an apartment; non-U.S. citizens, including illegal immigrants, can rent an apartment. A landlord cannot legally deny a rental application based on country of origin, religious status, handicap, familial status, race, gender, or age.

Can a non US citizen be a landlord? ›

The non-US owner must obtain a US Individual Taxpayer ID Number (an “ITIN”), if one has not already been obtained. Finally the non-US owner must complete the IRS Form W-8ECI. The IRS Form W-8ECI is not completed unless the foreign owner obtains an ITIN. A new IRS Form W-8ECI should be completed every 3 years.

Can undocumented immigrants get Social Security number? ›

Unless you are a noncitizen who wants to work in the United States, you probably don't need an SSN. Generally, only noncitizens authorized to work in the United States by the Department of Homeland Security (DHS) can get an SSN.

How does being undocumented affect you? ›

Unfortunately, the longer these immigrants live in the U.S., the more at-risk they are for diminished health outcomes given the constant and chronic stressors that they face, including socioeconomic disadvantage, harsh living conditions, demanding work schedules, stigmatization and discrimination, constant fear of ...

What are the disadvantages of immigrants? ›

However, disadvantages of immigration include conflict of values and attitudes between immigrant and local populations, potential costs to the taxpayer, and potential changes to a nation's collective identity.

Can you evict a tenant from an illegal apartment NYC? ›

Conclusion. Illegal occupancies abound here in NYC, especially in Queens and Brooklyn. That being said, if you are a landlord and want to evict a tenant but not sure because you have someone living in an illegal basement, the answer is that you can.

Can NYC landlords not accept rent? ›

My landlord refused to accept my payment, what do I do now? It is not legal for your landlord to refuse your rent payment, except under very rare circumstances. If you try to pay your rent and your landlord says you can only pay electronically, you can send a letter to explain your rights.

Can New York landlords evict tenants? ›

In New York State, an eviction of a tenant is lawful only if an owner has brought a court proceeding and obtained a judgment of possession from the court. o A sheriff, marshal, or constable can carry out a court ordered eviction. An owner may not evict a tenant by use of force or unlawful means.

Can you go to Canada if you are illegal in the US? ›

Yes, people who are illegal in the USA can legally apply for a visa to Canada. The important thing is to be honest about your undocumented status and prior immigration violations. Only an experienced lawyer who has dealt with undocumented applicants can advise you on your best Canada Immigration Strategy.

Can undocumented students travel abroad? ›

If you are a DACA recipient, you too can participate in a program abroad. The I-131 Application for Travel Document, also known as Advanced Parole, grants people the ability to leave the United States for purposes such as “educational, employment, or humanitarian,” and return back.

What qualifies as undocumented? ›

Who Is Included in the Term “Undocumented”? We define the term “undocumented” broadly to include all immigrants who reside in the United States without legal status. This includes individuals who: Entered Without Inspection (also known as “EWI”)

What happens if you travel illegally? ›

Punishment for illegal immigration along with committing other crimes may include the following: If deportation happened with a conviction of three or more misdemeanors, such as crimes involving drugs or other felonies, the consequences may be: Fines. Up to 10 years in prison.

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