Tenant Applicant with Cosigner who is retired - accept or deny?

Question

I have a unique situation with a tenant applicant for one of my rental units. On her own she fails to qualify for the apartment because of insufficient income but her mother is willing to co-sign on the lease agreement. Normally that would suffice and allow approval but the mother is retired with only $45k in assets in the bank. Additionally she has some spotty credit history with some late pmts on credit cards and some closed accounts. The mother has just over a 600 credit score which is our baseline requirement and the tenant applicant has slightly higher but again not enough income.

How should I assess this application for tenancy? Deny or Accept?

There has been lots of activity on this opening but this tenant was the first to submit an application. I have plenty of time to locate another qualified tenant if I pass on this applicant before any vacancy starts to hit my bottom line. What do you think?

How should I assess this application for tenancy? Deny or Accept?

There has been lots of activity on this opening but this tenant was the first to submit an application. I have plenty of time to locate another qualified tenant if I pass on this applicant before any vacancy starts to hit my bottom line. What do you think?

Account Closed · Answer

Pass

Nathan Gesner · Answer

Deny.

I do not allow co-signers. The people occupying the rental have to qualify on their own because it's too difficult to go after a cosigner. Imagine if you accepted this applicant with their co-signers. The tenants skip out on the last month's rent and leave some damages. Do you honestly believe the cosigner is going to come up with $2,000 to pay the debt? Do you have any idea how hard it will be to collect the debt from a co-signer that never occupied the property?

Michele Fischer · Answer

At the very least, make sure the co-signer is not terminally ill, that happened to us, LOL! If it were something other than income we would get co-signer and additional deposit to mitigate risk, but agree with others that not enough income is a non-starter.

Brian Green · Answer

Thanks guys - will do.

Matthew Paul · Answer

Move on , the cosigner should be able to carry the whole bill on their own . In addition to their other obligations

Thomas S. · Answer

Insufficient income...Deny

Why are you wasting your time and exposing your self to unnecessary risk by seeking a co-signer. You are trying to make a unqualified applicant fit that will never fit. Never ever do that. Do not compromise your screening standards or you will regret it every time. The whole point of screening is to find reasons to reject applicants, by finding ways to make unqualified applicants pass you are undoing the entire purpose of screening.

And raise your base line credit requirement. 600 is way too low regardless of your class of property. 650 should be a absolute bare minimum to mitigate your risk.

Tenant Applicant with Cosigner who is retired - accept or deny?

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