I have a prospective tenant who is foreign. She has just graduated from college in the U.S. on a student visa and is looking for full-time employment (her visa is valid for another 10 months). She has not yet established credit. Her parents (who live abroad) are willing to co-sign, but I don't see a way to run a credit check on them or, practically speaking, how I would even enforce a co-signer agreement with them if the tenant and her parents default. Any suggestions? You can assume she cannot pay full rent for the lease term up front.
Thanks very much for any assistance!
@Denise Gold , a few ideas to help reduce risk:
- Upfront Rent: Have them pay the first 2-3 months upfront, plus the security deposit.
- Increased Security Deposit: If they are against upfront rent then consider increasing the security deposit to your area's legal max.
- Proof of income/funds: Have the co-signer provide their latest 2-3 bank statements to prove they can afford it.
- Roommates: Are there any roommates for this individual or is it a single?
- Background Check: Anyways she doesn't have credit, I would still run the background and credit reports on her.
Month-to-Month Lease: Have her accept a shorter term lease that way you can cancel the renewal much earlier in case something happens. It could be a 1,3, or 6 month lease.
@Denise Gold have you met her in person?
In my rental property I have received emails with people interested to rent and they explain a very similar situation. It is a scam. I just want to make sure you are aware in case she has contacted you by email.
@Kenny Dahill out of curiosity, is there a maximum upfront rent you can ask? or you can ask for as much upfront rent as you want?
I would assume each local regulation is different. Although I am sure it's not enforacble if the tenant refuses the idea.
@Kenny Dahill Thank you very much for your very good suggestions. Yes, there are two roommates, and I plan to have them sign one lease making them jointly and severally liable, but I know they're all young and on a budget. Even though I could force the roommates to pay if the one tenant defaults, I'd like to avoid that.
@Joaquin Camarasa Thanks for looking out for me, but I'm pretty confident this one's legit. I have not met her, but one of my current tenants in the house (would be a new roommate) has. I've also found good info about her online that backs up her identity, and I will be doing a background check.
@Rachel Foster Hmm, that's interesting...I wasn't aware of such insurance. You mean like a surety bond?
One thing I was thinking about is whether there's a way to set up an escrow account into which she could put all of the year's rent up front (as mentioned, I don't think she has the cash to do that right now, but if she did...) and from which I could withdraw the rent on a monthly basis. She would be protected, and I would be protected. Has anyone done this? Without paying big transaction fees to the bank?