Rent Guarantor/Co-Signer: What It Is and Why You Need One

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Rent Guarantor/Co-Signer: What It Is and Why You Need One

Cassie Damewood · Feb 15, 2022
Graphic illustrating a potential tenant and their lease guarantor speaking with a property manager.

If you’ve been trying to rent an apartment and keep getting told you need a lease guarantor or co-signer, you may be confused as to what the landlord wants and why. Luckily, it’s not so complicated to understand, although it might be difficult to find someone who’s willing to fill the position.

What is a Co-Signer?

A rent or lease guarantor is simply the legal term for an apartment co-signer. You may have heard of co-signers before when purchasing a car (a common practice), and an apartment co-signer has exactly the same responsibilities. They agree in writing to take responsibility for someone else’s apartment, including activities, upkeep, adherence to property rules, and, most importantly, making sure the rent is always paid in full and on time.

Reasons a Landlord Might Require One

Like many life challenges and situations, co-signing all comes down to money. You may have a great job and a sparkling personality, but if research shows you owe tons of money, are late on payments, never paid your rent in full and/or on time in the past, and have a meager income, landlords will likely find you too risky to rent an apartment to without some form of backup, which most commonly comes in the form of a rent guarantor.

There are three main reasons a landlord may insist on a co-signer: low income, spotty rental history, and bad credit.

Low Income

The rule of thumb for how much rent you can afford is based on your take-home pay. If your monthly rent is one-third or less than what you make each month, you’re good. For instance, if you bring home $3,000 a month in salary, the maximum rent you can comfortably afford is $1,000 (assuming you’re also being careful to set a few bucks aside for emergencies, which will inevitably occur). In many areas where the rent is outlandishly high, landlords may require your salary to be twice as much as the rental rate. If you can’t meet these requirements, a co-signer might also be mandatory.

Poor or Non-Existent Rental History

Poor rental history can follow you for years. Eviction is the worst mark you can have on your record, regardless of the circumstances. However, if the eviction was questionable — for instance, based on a dispute you had over unsafe living conditions — you’ll want to provide lots of supporting documents from a court or judge explaining the circumstances. Missed and late rent payments also work against you, as well as complaints from neighbors about noise, altercations, cleanliness, etc. All these infractions can make you undesirable to prospective landlords, regardless of your financial stability.

On the other hand, if you have no rental history (i.e., you’re a first-time renter), a co-signer will likely be required. The good news is that it’s much better to have no history of renting than it is to have a bad one.

Bad Credit

Even if you have a great background and always pay your rent in full and on time, a prospective landlord can still ask for a rental guarantor based on your credit history. A credit report that shows you always pay the minimum due on your major and retail credit card accounts tells the landlord you’re a poor money manager. That record also suggests it will take years for you to pay those cards off based on the accruing interest, even if you don’t use them anymore. The combination of those factors could very well make them think twice before trusting you to set enough money aside for rent each month, in turn causing them to require a co-signer.

Finding a Co-Signer

Typically, a co-signer is a parent, grandparent, sibling, or anyone else who inherently trusts you and knows that you have good character. Former bosses whom you’ve impressed could also be willing to co-sign for you, but you may have to repeatedly plead your case to them since the co-signer takes all the risk of the deal. You should also consider what will happen to your relationship with them if you fail to hold up your end of the bargain. They will not only lose money, but they’ll also likely lose faith in you and your word. If possible, you may want to put up collateral such as a car or valuable jewelry as an act of good faith.

If No Co-Signer is Available

If for some reason you’re unable to find a guarantor, consider moving in with a roommate and getting your name added to the lease. This may help in the future when you want to rent a place on your own. Ask friends and neighbors who see you as honest and responsible if they know of anyone renting a room, apartment, or house month-to-month who would give you a chance to prove your financial responsibility. You can also check out the Section 8 housing availability in your area for low-income options.

In the meantime, take steps to clean up your credit history, explore housing options in outlying areas, and look for a higher paying job.

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