Rental property owners concerned over tax rates
By Long Hwa-shu Special to The News-Sun January 4, 2013 5:30PM
State Senate 31st District Melinda Bush of Grayslake. | Special to Sun-Times Media
Lake County Investors Association
The non-profit organization meets second Tuesday of every month at the Gurnee American Legion with a speaker to discuss issues common to its members.
At its height, it had 200 members, according to Linda Liberatore, owner of Secure Pay One Inc., a real estate management services firm in Schaumburg, who is the group’s president. The membership is down to 160, but is expected to pick up when the economy improves, she said.
Updated: February 6, 2013 6:01AM
Rising property taxes, non-payment of rent, unauthorized increase of tenant numbers and evictions are among concerns of rental property owners as the new year begins.
While the rental property market is booming because more people find it next to impossible to buy a house these days, increasingly, rental property investors are faced with a litany of new or more heightened old problems because of the weak economy.
These include the increasing unsavory need to evict non-paying tenants, malicious destruction of property and the cost of eliminating bed bugs, in some cases.
“I have seven tenants. Two are behind in their rent payment. They have lost their jobs,” said William Benjamin of Wilmette who owns a four-unit apartment in Waukegan. He indicated he may have to take them to court and evict them, unpleasant as it may be.
Benjamin also pointed to the rising cost of insurance and water, and the costs associated with Waukegan’s mandatory inspection and licensing fees.
“Most of the rental property owners are retired people. To them this is their supplementary income. That’s why we are trying to keep the cost down,” he explained.
Stephanie Victor of SAVVY Investments of Illinois in Lake Forest, who owns 13 properties, including some in Zion, too, faces the problem of collecting delinquent rent from tenants who have lost their job. Reducing the rent in some hardship cases does not solve the underlining problem because these tenants are jobless.
“I’ve always been careful in screening my tenants, but you can’t foresee who’s going to lose his or her job in these hard, uncertain times,” she said.
Some tenants, she said, lied about the size of their household when they filled out their rental applications.
“One would tell me, ‘Just me and my boyfriend or just my husband and two kids,’ but later you found out the whole family has moved in to save money,” she recounted.
Mel Withrow of MGW Services in Mundelein and owns 120 apartment units in Mundelein and Round Lake Beach stressed the need “to get qualified tenants because people will often mislead you.”
“But my No. 1 problem is the real estate tax which is my biggest expense,” he said.
At a recent meeting of the Lake County Investors Association at the Gurnee American Legion, state Sen.-elect Melinda Bush, D-Grayslake, assured the property owners that she will work trying to shift the tax burden from property owners to other sources through “revenue swaps.” These sources, she said, could come from increases in income tax, sales tax and others.
Most of property taxes, or an estimated 75 percent, are used to support schools.
Calling the property tax “unfair,” Bush who replaces long-time Republican Sen. Suzi Schmidt of Lake Villa in the new 31st Senate District, said the tax is out of touch with realities because it does not take into account the changing value of the property or the owner’s economic conditions.
“I want do something to make it more equitable,” said Bush who will be sworn in Jan. 9 and plans to open district offices in Grayslake and Zion.
State Rep. Rita Mayfield, D-Waukegan, a former rental property owner, said she got out of that business after her “horrible experience” with a tenant who “trashed” her place.
She urged property owners to contact her or her office to voice issues concerning them and for introducing possible legislation to ensure their rights.