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Old 07-30-2012, 02:25 PM
 
3 posts, read 6,360 times
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I just bought a multi families house in Chicago. I'm renting out 1 floor. This is my first time being a landlord. I want to make sure I don't do anything illegal that will cause me troubles later.

*I read on the internet that in order to make sure the potential tenants can pay their monthly rent, I need to make sure they make 2.5 times the rent. Is it legal to ask how much they make a month?

What other questions should I ask? Here is my list:

1)How many people and what are their relationship to you will be living in the unit?
2)What is the reason for moving?
3)How long is your intended rental term?
4)Occupancy Date?
5)Do you smoke?
6)Do you have pets?
7)How is your credit?
8)What is your occupation?
9)Landlord references?

*From what I read, I will also need to run credit check on them. What service would you recommend? What is the minimum score should be met?

*Where do I get form templates for the credit consent, lease, contract ... ?

A lot of questions, I know. Thanks for your inputs.
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Old 07-30-2012, 02:54 PM
 
829 posts, read 1,700,360 times
Reputation: 1549
Buy this, like.. NOW

Amazon.com: Landlording: A Handymanual for Scrupulous Landlords and Landladies Who Do It Themselves (9780932956255): Leigh Robinson: Books

It's got everything you could ever want about being a landlord.

As for credit checks, don't just rely on a single number, as that will surely land you in hot waters. Its not about their credit score, its about their credit history. Are they up to their eyeballs in debt? Do they have a history of acquiring charged-off debt? Have they sued prior landlords? Have they been evicted? Do they have criminal history in their names?

Do not cheap out with a crappy credit-checking company. Spend the $40/$75 for a FULL, Nationwide Credit, Criminal and Court records, after all, the aplicants are paying for it. Google their names. Find their facebooks. Google their email addresses and phone numbers.

Also, people will look at you in the eye and lie to your face. You very quickly learn to not take anything at face value, ever. People will also have all kinds of sobs stories. Remember you are NOT a charity, you are not there to help-out, or give a hand-out. The #1 most important thing for a new landlord to learn is HOW TO SAY NO and stick to it. No matter what the story or the circumstance. Learn to say NO and stick to it. You are running a business, and a saavy, criminal and scum-bag tenant can put you in financial ruin in no time.

Landlord references. USELESS, unless its their previous landlord from their current one, or the one before. Remember, a landlord will give a glowing review to a problem-tenant just to get them out of their hair. The same way that a problem tenant will give you their best friend's number to pretend they are their landlord and give a glowing review.

Read your local landlord/tenant laws and memorize them. FOR SERIOUS.

Best of luck, being a landlord is hard work, but very rewarding if done right.
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Old 07-30-2012, 02:56 PM
 
5,293 posts, read 5,444,279 times
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The landlord decides the term of the lease. You don't ask them this on the application.

Go to mrlandlord dot com. go the the question and answer section. The landlords will give you specifics. There are many on that site. The same site also has a credit checking company. I used them before.

It is legal to check credit and you should do this. But have them fill out an application first and sign and agree to this. Google to get an applicant and tweak it yourself as needed.

Also you need to learn all details about your state and Chicago's landlord tenant law. This is very very very important. also read and understand the federal Fair Housing Act. and the state and local ones (if any) as well. they would all apply to you.

You need a good lease too. You use this after the tenant submits their application and is approved by you.

You need to decide if you want to rent to smokers. If you choose not to, do NOT rent to them if they say they will smoke outside. Just pass on them.

You need to decide if you want to rent to people with pets. If yes, what kind and is there a limit. then you decide on the amt (if any) of Pet Fee (non refundable) that you charge. Then also have a Pet Addendum in the lease. Also if any extra monthly pet rent.

Get application on all applicants 18 and over even if they dont work. You have to see if any of them have an eviction or other credit issues. They might say this person doesnt work and hope you dont check that persons credit history.

realize some renters have good sob stories and want you to fall for them.

aks for make.model.color of each car they have and tag# on the application. You will need this later if extra cars are there and this way you determine if they snuck in new tenants that are against the lease.

You get their employer name and HR tel# of employer. And start date and current pay. and get a copy of last paystub. You want to call and verify their income from HR as well. you might have to fax a copy of application to HR for them to release this info to you. the application gives you approval to do credit check and Employment verification and all applicants must sign the application.
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Old 07-30-2012, 05:29 PM
 
90 posts, read 174,435 times
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There are very specific tenant /landlord laws in the City of Chicago. You need to go down to City Hall and educate yourself before you start looking for a tenant.
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Old 07-30-2012, 08:27 PM
 
Location: California
4,404 posts, read 5,359,263 times
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Get the LL book people are mentioning and investigate the laws in the area. I am going to put some of the legal issues I see just from your list of questions in bold next to them.

Quote:
Originally Posted by ChicagoLandlord View Post
I just bought a multi families house in Chicago. I'm renting out 1 floor. This is my first time being a landlord. I want to make sure I don't do anything illegal that will cause me troubles later.

*I read on the internet that in order to make sure the potential tenants can pay their monthly rent, I need to make sure they make 2.5 times the rent. Is it legal to ask how much they make a month?

What other questions should I ask? Here is my list:

1)How many people and what are their relationship to you will be living in the unit?
Opens you up for a claim of discrimination against married, not married, gay, straight, etc. You can ask relationships for minors, for anyone over 18, don't go there.

2)What is the reason for moving?
Careful here too. A better question is asking if they gave legal notice to current LL. Reason for moving, well, a good legal aid lawyer can turn this into a question intended to find a reason to not rent to them. If they are a minority, etc. you could be in for it...

3)How long is your intended rental term?''
Decide on your own and get a lease that everyone signs. If you start not renting to people who don't answer with what you want, they will, I guarantee, find ways to call it discrimination.

4)Occupancy Date?
5)Do you smoke?
6)Do you have pets?

These should be ok...as long as you decide if you are renting, or not, to pet owners and/or smokers. Pick one and go with it. But don't change it.


7)How is your credit?

Run a credit check and have standards that you follow for ALL applicants over 18.

8)What is your occupation?
This could start to look like discrimintation if you never rent to farm workers but always to waiters. Ask about income and for a pay stub/s, but stop there.

9)Landlord references?
No real point. Get the credit check. A LL will give a good reference to a tenant they want to get rid of.

*From what I read, I will also need to run credit check on them. What service would you recommend? What is the minimum score should be met?

you need to get an idea of the socio economic makeup of the area and base it on that. The credit score of a Bev Hills Lawyer may be very different than that of a migrant farm worker (keeps coming up as I am from a farming community and I know LL who would discriminate against the migrant worker)...the 2 may or may not be comparable...but this does not mean they have good or bad credit, merely different credit.

*Where do I get form templates for the credit consent, lease, contract ... ?

A lot of questions, I know. Thanks for your inputs.
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Old 07-31-2012, 08:12 AM
 
1,001 posts, read 963,923 times
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If afterwards you feel that being a landlord is not for you, you can hire a management company for a percentage of the rent. You may find it is worth it. Good luck. I hope you find some great long term tenants.
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Old 07-31-2012, 03:52 PM
 
5,293 posts, read 5,444,279 times
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one of the posters above suggested that you should NOT ask for job title. I always did this. This is very common in rental applications.

You can choose not to rent to certain job types if you want. As long as your are not discriminating by a protected class, then you are ok.

I read where a landlord refused to rent a place to an attorney because he thought attorneys would be more likely to file a lawsuit. The attorney filed suit against the landlord for getting turned down over job title. The landlord won the court case.

You could choose against renting to pet sitters because you think maybe they bring pets home to watch. You could choose not to rent to a drummer because you dont want to get complaints about loud drums.

I would want to know someone's profession because I want to evaluate whether there would be a consistent income and also the standard pay range for this job. For example, you might not want to rent to someone that does grass cutting for a living and nothing else and they live in MN. What do they do in the winter for money and do they make enough money in the summer to cover bills in the winter.

Bottom line, if you are not choosing renters by a protected class then you are ok. See fair housing act for protected class. It is mainly race, religion, country of origin, handicap, gender, family status (means if they have kids or are pregnant). I dont' remember if age is a protected class as long as an adult (cant refuse kids as they are protected). gay/straight is not a protected class but who wants to go there anyway.

BTW, most small landlord are exempt from federal Fair Housing Act, except for the advertisement part of it. You must check your state and city Fair Housing Act to see if same exemtions. Read them all to see if you are exempt. Not that you would choose to discriminate - but rather - you want have to cower to these laws dicating everything you do since they dont all apply to you so it would get thrown out of court because you are exempt. So you can ask about a Job Title and not be afraid to get sued over Fair Housing discrimination because someone might say you used the job title to determine race, when you didn't
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Old 07-31-2012, 04:05 PM
 
4,919 posts, read 10,512,638 times
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In addition, know your State housing laws. Although the federal law sets out what is descrimination and what is a proteceted class and who it applies too, many States have their own version of this that adds additional protections to others, applies the laws to those who might otherwise be exempt under federal law, and even require certain accomodations that are not mentioned in federal law. So, read and understand your State housing laws as well.
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Old 08-01-2012, 11:10 AM
 
3 posts, read 6,360 times
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Thanks for all the valuable inputs guys. I borrow the Landlording book from the library. It has some great insights but a bit outdated in the way it recommends doing advertising and such.

Quick question, I have a lady who is helping and willing to cosign the lease for her son who goes to Uni and works part time to move in with two of his friends. She said they will be responsible for the rent but she's willing to help them out. Who should I do the credit check and employment checks? For the employment check, can I ask the HR department how much they make? What else do I need to do in this case?
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Old 08-01-2012, 12:22 PM
 
829 posts, read 1,700,360 times
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Quote:
Originally Posted by ChicagoLandlord View Post
I have a lady who is helping and willing to cosign the lease for her son who goes to Uni and works part time to move in with two of his friends. She said they will be responsible for the rent but she's willing to help them out.

Get ready for some COLLEGE PARTIES!!!!!!!!!!! YAAAAAAAAAAAAAAAAAAAAAAY!
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