Landlord question: Guarantors or no guarantors

Good morning, I am the landlord of a small owner-occupied building and I’ve never been asked if I accept guarantors until yesterday. I wondered if people had advice/opinions on the matter. Specifically: 1–pros/cons in general 2–what, aside from a credit report and tax returns, would you ask from a potential guarantor? 3–is there a standard ‘guarantor form’ for NYC? 4–do you have strong opinions whether or not the guarantor should live in the tri-state area? (to avoid protracted legal issues in different states legal systems etc.) The potential tenant seems very nice and responsible so I would like to rent it to them, but I don’t want to be opening myself up to some unforeseen terrible risk. Thank you in advance for your help/thoughts.

chych

in Landlord 10 years and 9 months ago

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landlord | 10 years and 9 months ago

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I have accepted guarantors several times. Never had an issue and they were some of the best tenants I have had.

ventilated | 10 years and 9 months ago

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We’ve accepted guarantors twice. One for a tenant relocating from another state, the other for the daughter of a friend of a friend. The relocater was the best tenant we’ve ever had. She showed up with a guaranty because she was a meticulous kind of person who got all possible ducks in a row before even applying for the apartment. The 20-something daughter was an okay tenant, but instead of just asking for an early out of her lease (which she would have gotten) tried to pull a stunt instead. That’s a character issue, not a credit issue. After a few conversations with the guarantor, the rent was paid. You write “the potential tenant seems very nice and responsible so I would like to rent it to them.” If they supplied personal references, I’d talk with them, and put more stock in your own gut feeling and the conversations with the references, than in accepting or nixing the tenant on the basis of a guaranty.

curiositykilledthecat | 10 years and 9 months ago

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We accepted a guarantor once, about 8 years ago. Father of the brother/sister tenants. It worked out great. If memory serves, we checked him out as we did the tenants, income/credit/etc. I think we had another line on the lease that he singed (meaning, both tenants signed AND the guarantor, too). We never had any problem, so I can’t confirm it would hold in court, bit it worked for us. Good luck.

snowman2 | 10 years and 9 months ago

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I do not accept guarantors. If I can rent it to a grown up with adequate income (and in 30 years I always have), then I do not want to take the risk of having a tenant who cannot afford the apartment. It’s also a maturity thing. Just like I can’t afford to live on Park Ave, I don’t want someone that daddy has to rescue or who just wants the nice apartment in a higher end neighborhood. There are many very nice affordable neighborhoods they can live in. It’s difficult enough to judge the tenant, much less also having to judge a guarantor with their own life.

Arkady | 10 years and 9 months ago

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We did it once w/ an out-of-state person but had him sign in NYC w/ a local law firm when he was on a trip here to help his daughter. It worked out well even though she was a less than ideal tenant: her father made no noise about our keeping most of the deposit to cover repairs, etc. That experience might lend credence to the idea that someone in need of a guarantor could be a problem tenant.

resident2 | 10 years and 9 months ago

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It depends on the reason for the guarantor; is it because the tenant is a full time student? Is it that they have screwed up their credit? Is it that they do not make enough money to comfortably pay the rent on their own? I would never accept a guarantor from out of State, it is a show of good faith but unenforceable in Court. The guarantor needs to make at least 80 times the monthly rent to prove that they can cover their own as well as this dependents expenses. Yes you need a full credit and income and ID verification application from them. If it is that the potential tenant does not make enough; I prefer that the rent is bought down to a comfortable monthly amount that they can afford; IE: if the rent is $2,000 but on their own income (25% of income to cover rent) they can only afford $1,500.00 they pay (Parents probably) $500 x 12 = $6,000 up front so that the tenant pays what they can afford each month ($1,500) If it is because the person has screwed up their credit etc. I would not do it!

timber | 10 years and 9 months ago

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I did it once, it was the father of a potential tenant who was the guarantor. The father lived in North Carolina. A friend who is a realtor gave me guarantor form and I did ask for the first and last month’s rent plus security. The tenant turned out to be great and I have no regrets. This tenant did not have the best references but I had rented an apartment to his sister years earlier.