Risk of renting to someone that needs a Guarantor

I have 2 people recently graduated from college that want to rent my apt. They both combined do not meet the 40X rent requirement. Each of their parents are in California and will need to be a Lease Guarantor. Is this risky? What should I make sure is included in the lease or outside the lease to be safe.

allyslope

in General Discussion 4 years and 10 months ago

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BKALLDAY | 4 years and 10 months ago

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Just for future reference. I have rented to students in the past. Not multiple roommates, just one at a time and their parents were the Guarantors. I asked for first months and 1.5 months of security. I made sure to get everyone’s social security numbers and put in a clause that they could not move in their boyfriends and all partying after midnight had to go indoors (they had access to the yard). I never had a problem and even met the parents of some. Be sure to find out what they were/are majoring in and what the parents do. I think based on that, you can tell who is going to be responsible. If you can, have a chat with the parents prior to moving in. I found that when they worried about their kids they would call me and I would communicate that all was going well.

allyslope | 4 years and 10 months ago

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Thank you for all the replies. They ended up not processing with the rental. The listing said no washer or dryer. Not sure why they think we would add it for them later.

Guest User | 4 years and 10 months ago

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You can provide tenant OPTION of establishing a security deposit insurance account via sayrhino.com that covers two months worth of rent INSTEAD of traditional security deposit equal to one month of rent. It is possible for an applicant to be too risky to approve with a traditional security deposit equal to one month, but to have lower risk of establishing a security deposit insurance account covering multiple months worth of rent

Guest User | 4 years and 10 months ago

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You can provide tenant OPTION of establishing a security deposit insurance account via sayrhino.com that covers two months worth of rent INSTEAD of traditional security deposit equal to one month of rent. It is possible for an applicant to be too risky to approve with a traditional security deposit equal to one month, but to have lower risk of establishing a security deposit insurance account covering multiple months worth of rent

mozeeatupu | 4 years and 10 months ago

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Since the new laws, no deposit or advance shall exceed the amount of one month’s rent.
I’ve had no issues renting to young people with a parent guarantor in another state.

yudashasom | 4 years and 10 months ago

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You cannot collect more than two months of rent up front – no matter what you want to call it

95% of guarantors will make good. Most are not lawyers, or familiar with laws out of state., and don’t want a problem regardless

Guest User | 4 years and 10 months ago

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Sayrhino.com
Require multiple months rent coverage in the security deposit insurance policy.
I do this for my clients’ incoming tenants who are borderline approveable

Guest User | 4 years and 10 months ago

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Sayrhino.com
Require multiple months rent coverage in the security deposit insurance policy.
I do this for my clients’ incoming tenants who are borderline approveable

resident2 | 4 years and 10 months ago

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An Out of State Guarantor is not worth the paper it is written on, because it becomes a Federal Case to enforce. And many tenants/guarantors are well aware of the fact.
One option I use is to allow them to “buy down” the rent to the amount that they do qualify for. IE if their income qualify s them for 1,200, but the rent is 2,000, their Guarantor pays $7,200 up front and the tenant pays $1,200 per month. Write the lease for the full amount & collect the full amount of security deposit.
Or they can get one of the many Rent Guarantor Insurance policies. They will go with the buy down option… much cheaper & teaches their little to be responsible.

yudashasom | 4 years and 10 months ago

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Some people on this website speak with very limited or little-no experience.

There’s no reason to not get a guarantor.. it’s just another person that becomes liable for the rent.

Use the Blumberg form. Check credit, financials etc

GreenThinker | 4 years and 10 months ago

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In reality, it’s not worth going after a guarantor for money owed, and even less so if they live in another state. I never had an issue with young tenants, their parents usually help them out if need be. Being a landlord is risky, there’s always a chance someone won’t pay you and it’ll take 6+ months to get them out.

allyslope | 4 years and 10 months ago

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@no-permitz Thanks.
What should be included in the guarantor form. I have never done this before. Does the guarantor need to have their credit score run also to make sure they are legit. I think the new NYC rule is 1st months rent and only 1 month’s security deposit. If there is a guarantor can I ask for another month’s security.

yudashasom | 4 years and 10 months ago

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I require almost every young tenant to have a guarantor.. regardless if they have the income or credit to qualify on their own. It was very helpful when these young progressives were asking for free rent. “Ask your guarantor for help, not me.”

There’s some risk with out of state guarantors but it never gets to that point