As a landlord, it's up to you to make sure you're getting reliable tenants into your properties. Tenants are the lifeblood of your business and having too many tenants that don't pay their monthly rent can hurt your business dramatically. That's why it's so important to take the time and evaluate potential tenants very carefully before deciding to rent to them. Unfortunately, it can be difficult finding creditworthy tenants to put into your properties. Perhaps you are having trouble locating good quality tenants. Or on the other hand, there are tenants you aren't sure about but would like to give a chance. These are both cases to consider adding a lease guarantor to your rental agreement.
A lease guarantor works as added security for you that you'll get your rent payment. Further, it helps establish that the renter is responsible enough for someone else to vouch for them. There are many benefits to a lease guarantor (or cosigner) arrangement and that's why many landlords use such an arrangement today.
A lease guarantor is a person that will go onto a lease without actually living in the property. This person agrees to make the rental payment if the actual renter doesn't make the payment for some reason. Because of this, there are very few people that will agree to be a lease guarantor. Often a cosigner is a spouse or a parent of the person that's trying to get their hands on the rental property. This person is willing to put their own income on the line to make sure that their loved one has a place to live. Landlords renting out to students will typically use a lease guarantor when their student tenants haven’t built up a credit score.
By requiring a guarantor on the property that you are renting, you can double guarantee that you are going to receive your rent payments each month. Not only do you have the actual tenant to pay the cost of living there, but you have their more creditworthy friend or family member as backup. This does two different things to offer you security. First, it pressures the tenant to make payments reliably to protect the person that vouched for them. It also leaves them with pressure from that person to make their payments on time. On top of that, it gives you another, more reliable and creditworthy person to collect money from. Adding a guarantor is good to do whenever you aren't sure about a specific candidate or you just want added security that your property is going to bring in the rent that it's supposed to.
Another reason to begin using guarantors on your rental agreements is to appeal to and reach more qualified candidates. By having the option to use a guarantor, you can qualify more people. This means that you can ask for higher rent prices, and you can appeal to a wider range of people than you otherwise would be able to. Adding a cosigner gives you more security and ensures that your property is filled promptly.
If you're having trouble finding qualified renters that are interested in the property that you're offering, you have a few different options available to you.
You can hire a property management company like Blueground to furnished and market your property as a corporate rental to business executives and other quality tenants. Or, you can craft a guarantor agreement and get candidates that make enough money but don't have good enough credit to find a guarantor that will agree to be on the agreement. Have a lawyer draw up a guarantor form for you, and do a thorough background and credit check on anyone that is willing to serve as a cosigner for the other person. Make sure that the prospective renter has enough income to make rental payments. Secondly, you'll need to check the guarantor's income to make sure they can come through with the payment if need be.
Running a successful rental company is time-consuming and it can be difficult at times. Finding high-quality tenants isn't always a simple task, which is why it's important to have tools like a lease guarantor agreement at your disposal. If you decide to work with a property management company such as Blueground, a deposit is collected at the lease signing and monthly rent is collected on your behalf. If you want to find the most reliable tenants for your properties consider hiring Blueground to manage your properties. Blueground becomes your primary tenant who always pays rent on time, and in turn, looks for business executives as sublessees for one to twelve-plus month sublets.