Do most of you trust a guarantor when finding a tenant even when guarantor have income=80x rent. Prospective client is renting as a guarantor for mother in law to live nearby him, proposing to do a 2 year lease, mother in law who will be the occupy is retired so all credit check and income is based off daughter and son in law. Not feeling comfortable but this is the only offer for now, please advise
The goal is to have a screening process that takes your gut feeling out of it. Too much work to deep dive into all your leads. Not sure what state you are in but if allowed do a credit check, criminal background check, verify income to be 4-5 times monthly rent ( my opinion ) and verify ID. Also have a solid application that asks important info and you should also do a rental verification when possible.
We will be running full screening on the guarantor (daughter and son in law) including credit/income/background check but the occupant will be mother in law who has no income or credit to verify. Not feeling so comfortable about this set up but this is the only offer currently. What is your opinion on renting to this prospect assuming al results come back positive with the guarantor?
@Jc Law based on what you’ve laid out, I don’t see any issue with it. I rent to college students often and their rent is typically paid by their parents.
The guarantor or co-signer is on the hook of rent isn’t paid - it can and will affect their credit, so they have incentive to make sure everything is paid.
BUT I would only do a 1-year lease. Longer term leases don’t help the landlord at all (which is why many only do MtM leases). I always say that I’m looking for a long term good fit, but 1 year is the max. Happy to renew if everything is going well!
I do not allow guarantors. In a situation like this I would let the applicants know that you do not accept guarantors but only leaseholders. So the person wanting to be a guarantor can instead be a leaseholder (but does not have to live there). It will essentially work out the same for them. The reason I like this is it makes crystal clear to the applicant wanting to be a "guarantor" that they are equally responsible in the lease (not just financially). For example, if you have to proceed with an eviction then that eviction would also be on the "guarantors" record. That being said I would make sure to still run credit and background on the applicant who is not providing the income.
Regarding 'guarantors' on leases, we always have them on the lease as 'non-occupying co-signers' and have a clause whereby all signators are jointly and severally responsible for all the terms of the lease. Hope this helps.