I'm trying to place tenants for my first rental property. Yesterday, I was in the middle of vetting potential tenant applications, etc, when out of the blue, I get this phone call from a very well respected local/regional business man interested in my vacant unit. This individual expressed immense interest for his 2 employees who would be relocating from another part of the state. He would be paying for all of their living expenses, rent, utilities, etc. At first, Ithought it was a joke, but I researched this individual online and he is who he claims to be.
Now, here's my question....don't all 3 individuals (the business owner co-signer) and his two tenants need to fill out applications and go about this like due process just like everyone else? He wants to see my place right away.
I've never had a co-signer situation before. Does anyone have any tips, thoughts, or suggestions to help me? This is uncharted territory for me, especially having a possible co-signer.
Just happen to stumble across this and kinda ironic but a few weeks ago I was having dinner at the bar in Friday’s in Wilkes barre and met a guy who is a district manager for a car rental company and his boss wanted him to get an apartment in the area instead of staying in hotels. He asked me if I had anything available and I didn’t but kept his card. Said the company would pay for it all. Wonder if it’s the same guy lol. Small world you never know !
Screen the two applicants on their own merit and accept or reject accordingly. Do not involve the employer as a co-signer. Tell the employer that you require your tenants to be able to pay their own way and that he should be paying his employees directly as opposed to paying you. There is no reason for qualified applicants to have a employer pay their expenses.
Alternately you only have the employer as your tenant on the lease (not as a co-signer) and then allow him to sub let to his employees. This will allow you to treat the employer directly as a tenant. This way if there are any issues you go after him immediately instead of have to deal with the actual sub let tenants. This also is greater protection for you if he fires one or both employees or if they quit.
One or the other but I would not agree to allowing the employer as a co-signer paying your tenants expenses.
I do this all the time for my companies as the tenant since we have guys staying at a construction site for months. You just need to kind of tailor it to the situation so that the company is basically listed as a corporate guarantor. To protect yourself, I would ask for a higher security deposit than normal and ask for upfront payment, etc.
Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.
This is quite common with locums. I have a friend in Utah who does locums for the medical field. His company finds and pays for the residence. Some are shorter term than a year, but he pays a premium for the space ( up to double what would normally be charged) which is still cheaper than parking them in a hotel. He tells me his placements are RNS, MDs, etc. and the places are generally well treated.
You need background & eviction checks on the people who are going to be living there. You need a credit check on everyone. Beyond that, it's not really any different than the way we handle college students who rent our properties; their parents co-sign and thus are financially responsible, we run backgrounds on all the residents, collect first/last/deposit.
I'd say having a prominent businessman co-signing and having the ability to pay for damages absolutely makes a difference and changes the way you screen tenants. Isn't the entire idea of screening tenants is to make sure you get rent paid and to make sure, if damages are done, that damages also get paid for? Well, your businessman with the deeper pockets (not bigger pockets!) has that ability! Higher damage deposit, businessman (whom you should meet in person of course) co-signs and explains who will be living there.
I ask this....what if said businessman wants to rent your place for a year and says he has employees that will be different every few months? Perhaps you charge a premium and inspect your property more. But, would you just decline this business/tenant?
Maybe they are great workers, but horrible credit, and that's why he wants to do it. Also, the reason corporations would pay rents directly is because of tax implications on both the employer and the employee. I'm not sure how it works to rent a residential unit to a business entity.
I have an update. I received the applications. The business man filled out his application completely. However, the two employees, I was not provided with US identicifation. Instead, I got 2 ID cards that say : "Republicia De Guatemala Identificacion Consular". Does anyone know if this is like a Visa or Green Card, or if this is merely an ID of the country of Guatamala? There is a 12 digit number on the card along with a photo ID, name, DOB, Date Issued, Date Expired, and the last US address they lived in (which is in the other part of my state). My biggest concern, is obviously I need to know if they are legal, and I do not know how to process a background check when the applicant doesnt have a SSN or US ID Card.
Anyone have any experience handling anything like this before?
If they were legal, they’d have some form of US documentation. Many have a PR (Permanent Resident) cars, or will have their home passport with work visa documentation, again from the US and on very official looking paper.
I’d imagine you just found out why the company/businessman is handing their rental.
There are other threads on BP about the pros and cons to renting to undocumented persons. Worth a read.
Are you sure that truely was a prominent business man on the phone, or someone posing as him?
I just want to chime in to say that there's no reason to believe that it's your responsibility, legally or otherwise, to verify your tenants immigration status. There are no laws prohibiting renting to illegal/undocumented immigrants at the Federal level, and none at the PA state level that I'm aware of. This is completely a matter of conscience for you. If it makes you uncomfortable, you could have them sign a paper in English and Spanish saying that they swear they are in the United States legally. But really, that's not your job unless you have a local ordinance governing it.
All in all, if the employer is willing and able to pay, why not let him? I don't understand what a previous poster's general objection was to having an employer as a cosigner. You're protected either way. However, in this specific situation if the employer is listed as the direct tenant, with the ability to sublease to his employees, it might simplify matters for you (especially if you have to sue someone for damages/unpaid rent.) Much easier to sue the prominent local businessman for than two workers who were deported home to Guatemala.