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Daily Archives: March 1, 2022
It’s no secret that being a landlord can be trying. When you have a vacancy and the prospects are few and far between, you must evaluate the applicants in front of you. We stand firm that a landlord should never depend on their gut or emotions when deciding on whether to rent to an applicant or not. But when the best applicant you have doesn’t qualify, then what is a landlord to do? That landlord should require a lease guarantor.
What is a lease guarantor or cosigner, and when would you require one?
A guarantor does not reside in the rental but legally agrees to guarantee the tenant will follow all terms of the lease. Primarily this is used for income purposes, but a guarantor also is financially responsible for the condition, and any damages that may occur should the tenant violate the lease.
Typically, a landlord would require additional protection or a lease guarantor when an applicant cannot qualify on their own. This situation is common for those who do not have a good credit history or have never rented before. We find this often with younger tenants who are moving out on their own for the first time. It is common practice for parents to co-sign or guarantee a lease for a college student, as we have several times with our boys.
It is important to note that the applicant must have adequate proof of income, positive personal referrals (yes, we check those for every applicant), and a solid reason for wanting to move to the area of your rental. For example, new employment or moving back near family after living away at school are valid reasons.
How Does a Lease Guarantee Work?
Just as you do the applicant, you would also vet the guarantor. For example, a landlord scrutinizes the guarantor just as they would any applicant.
Most applications have a dual purpose for either the applicant or the cosigner. First, require the guarantor to fill out and sign the application, pay an application fee, and do a full background check. Look to make sure they have a stable income, own their home or property (in the same country as the rental), have a very clean and positive credit report, and have positive references.
The keyword here is stable. The income the guarantor generates would need to be enough to cover the rent should the tenant stop paying. We require 2 X’s rent over and above their personal expenses. So, Grandma with only $1500 in social security as her only income, would not be considered a safe bet as a guarantor.