4 roommates with 1 needing co-singer for single family home

Member since 2022 · 22 posts · 12 votes

Hey guys!

I have a single family rental home in Texas and this year we are getting 4 recent grads moving in. My experience always has been renting to families so I am not sure how I should go about doing this with renting to roommates. 1 roommate stated that his dad can co-sign for him since his income is lower than the others. In this case, how do I structure the lease agreement so that his dad is only cosigning for his portion of the rent and liability? Do you use the standardized Texas residential lease for this type of roommates situation? Thank you so much!

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Tim Herman

Member since 2018 · 2k+ posts · 1k+ votes

@Amy Lin unless you are renting out individual rooms you want all tenants to be liable for the whole rent. This is most common in leases. Your job is to collect the rent and their job is to pay you. Why make it harder for you to collect the rent. One check one deposit. They can arrange how to make the payments to you.

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Tim Herman
Member since 2018 · 2k+ posts · 1k+ votes
3y
@Amy Lin unless you are renting out individual rooms you want all tenants to be liable for the whole rent. This is most common in leases. Your job is to collect the rent and their job is to pay you. Why make it harder for you to collect the rent. One check one deposit. They can arrange how to make the payments to you.
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Scott Mac
Austin, TX · Member since 2019 · 5k+ posts · 5k+ votes
3y
Quote from @Amy Lin:

Hey guys!
I have a single family rental home in Texas and this year we are getting 4 recent grads moving in. My experience always has been renting to families so I am not sure how I should go about doing this with renting to roommates. 1 roommate stated that his dad can co-sign for him since his income is lower than the others. In this case, how do I structure the lease agreement so that his dad is only cosigning for his portion of the rent and liability? Do you use the standardized Texas residential lease for this type of roommates situation? Thank you so much!

A college graduate needs a co-signer to qualify to rent a ROOM (???)

What degree is this--do you know (???)
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Rosa Regier
Investor · Austin, TX · Member since 2015 · 73 posts · 54 votes
3y
Hey @Amy Lin I've had this exact situation a few times now. To clarify, I offer my properties as whole SFHs and not by individual rooms.
I make it clear to the unrelated tenants/roommates that they are 100% responsible for fulfilling the terms of the lease as a whole and not 25% each. I have the same conversation with the parent/co-signer. I also advise the co-signer that if the lease is renewed, that I'd consider removing them from future obligations. I've had no issues with roommates. I add the co-signer as a party to the lease, but not listed as an occupant. A different option would be to have the parent sign as a guarantor, using a residential lease guaranty.

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Nathan GesnerBusiness Member
Moderator
Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
3y
Quote from @Amy Lin:

They are all graduates, so they should all be self-sufficient. The fact that he is a graduate and can't qualify on his own is a red flag for me.
My policy is that I do not accept cosigners. I want the person living in the house to be a productive citizen.
I also have higher standards when three or more people are pooling resources. If a couple rent a house, I require them to make a combined income of 3x the rent. When three or more rent together, I make each individual earn at least 2x the monthly rent. Why? Because there's an 87.4% chance that at least one of the roommates will move out and I want to be sure the remaining roommates can afford the rent. If two roommates move out, the remaining two would still make a combined income of 4x the rent and could continue paying the bills while they look for another roommate.
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Theresa HarrisPro Member
Member since 2019 · 15k+ posts · 11k+ votes
3y
Tell them they are renting the house as a group, if one of them leaves, the others are still responsible for the entire rent and they can't sublet. You shouldn't need a co-signer as the combined income of the group should be enough. I agree with Tim's comment that you want the rent in one lump sum, not individually from each person. Also make sure that you get it in writing that the deposit is equally from all four and at the end of the lease the remaining balance of the lease will be divided equally amongst the four of them. With utilities make sure they are in one of their names before handing over the keys to the house.
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Carlos Ptriawan
Member since 2019 · 7k+ posts · 4k+ votes
3y
Quote from @Amy Lin:

Hey guys!
I have a single family rental home in Texas and this year we are getting 4 recent grads moving in. My experience always has been renting to families so I am not sure how I should go about doing this with renting to roommates. 1 roommate stated that his dad can co-sign for him since his income is lower than the others. In this case, how do I structure the lease agreement so that his dad is only cosigning for his portion of the rent and liability? Do you use the standardized Texas residential lease for this type of roommates situation? Thank you so much!

In CA the co-signer is still very common as rent is expensive for student, for Class A Apt, the requirement for cosigner is 5 times the individual rent application.
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Adam Martin
Rental Property Investor · Member since 2020 · 1k+ posts · 1k+ votes
3y
Was this something the prospect or his dad requested specifically? If not I don't see why you are trying to limit your ability to collect if someone doesn't pay. In this situation assuming the father was in good standing and especially if they owned property this is who I would pursue since I would have the best chance of collecting and it can be up to him to collect from the deadbeat friends.
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Amy Lin
OP
Member since 2022 · 22 posts · 12 votes
3y
Thank you all for the information and suggestions! Really appreciate it!
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