Renting to someone who just graduated - need cosigners?

Question

Hi all!

I live in my 2B/2B condo and I'm hoping to rent out the 2nd bedroom. I found someone who just graduated from college and said that she doesn't have the best credit because of some credit card mistakes she made in college. However, she said that her parents will be helping her pay for rent for the first few months and that I could check her parents credit background.

What should I do to verify she or her parents will be able to pay? Do I have her parents cosign on the lease? If so, how do I do that? Should I still check both their credit backgrounds?

The rental will likely be short term (6 mo- 1year), so it's a not long commitment, but I still want to make sure I do my due diligence and avoid any potential headaches! Especially since she'll be living under the same roof as me.

Thanks in advanced!

Karl B. · Answer

I did this with a tenant who was/is still going to nursing school. Her credit score was alright but she a few past credit issues which were explained to me but were still concerning. I had her dad co-sign and I checked his credit. He has a good-paying job and it turned out great as my tenant has been absolutely wonderful.

100% have one of or both of her parents co-sign. It likely won't be an issue (if they refused that would be surprising) plus the more people responsible for having the rent paid, the better.

Lyndal McMurphy · Answer

First… Is there a difference between just also putting them on the lease and then being a “cosigner”?    I just put them both on the lease and do a full credit and background check on both of them. I’ve done this a few times with Young tenants that just don’t have the credit or don’t have a lot of credit history yet.

Secondly,  it wasn’t a whole lot of extra work and I have a back up person to go to to collect rent if needed. This feels like an even better situation to me  more security, etc.  I like it.

I had a situation recently where a young tenant was not working out and not taking care of the property and I called up his mother who co-signed the lease and said I was going to have to do an eviction.  Of course she did not want that on her record and she was able to convince him to move out quickly and not trash the place. He would not listen to me at all. So this was another benefit of having one of the parents on the lease   :)

Vivian Huang · Answer

@Lyndal McMurphy thanks for sharing your experience. At first I was a little worried about her not having great credit, but I feel like that not unnormal for a post-grad. Me and my friends needed our parents to co-sign for our first apartment out of college. Plus, I appreciated that she was completely upfront about it and didn't try to hide it.

It does also comfort me to know that her parents are there as a backup. Worst case scenario she loses her job, I know she has a fallback to ensure she can make rent.

Grant Rothenburger · Answer

@Vivian Huang For what it's worth, I agree with @Thomas S.

Vivian Huang · Answer

Thanks for your input, @Thomas S. and @Christian Bachelder!

Thomas S. · Answer

Make your life simple, pass on this applicant and find one that will actually pass screening. Trying to make a unqualified applicant work is usually a big mistake. Plenty of fish in the sea keep looking till you find the right one.

Avoid th ecomplication of having to deal with a co-signer.

Vivian Huang · Answer

Thanks @Karl B. and @Karl Hadley

Karl B. · Answer

@Vivian Huang I just went with one co-signer - the main breadwinner parent. As far as references go he sent me his last two pay stubs and a bank statement and I called his employer to confirm he worked where he said he worked.

I had the parent fill out a rental application so I could run his credit.

I also paid a few dollars extra to check his criminal record (the apartment association in that area does both my credit and criminal checks for me). The criminal check really wasn't vital but I wanted to make certain he didn't have any fraud charges or anything like that (I was simply being cautious).

Yes - it's similar to looking at a tenants' income and credit information.

Karl Hadley · Answer

I'm not familiar with California law (Assuming that is where you're located), but you may also want to include them on the lease, I had a similar situation with a tenant in Ohio where the parents prepaid rent, my attorney recommended including the parents on the lease vs just as cosigners.

Renting to someone who just graduated - need cosigners?

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