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What Is an Apartment Guarantor?

A guarantor is someone who agrees to pay your rent in case you default on your lease contract. They'll need to be a lot more financially qualified than you.

As the name suggests, a guarantor is someone who guarantees that your rent will be paid each month. They sign a separate contract with your landlord, agreeing to be held responsible for rent payments in the event that you are unable to complete them.

Who needs a guarantor?

Generally, you’ll need a guarantor if your credit score or income is below a certain level. Most landlords require a credit score of 600 or above and an annual salary that’s at least 40 times the monthly rent. (A monthly salary that’s three times the monthly rent could work too, depending on where you live.)

You should also look into your options for getting a guarantor if you’re a first-time renter or are coming to the United States from a different country and looking for a place to live. If you freelance or have otherwise irregular income, you may need to use a guarantor—even if you have great credit.

You only need a guarantor if you're looking to be the primary leaseholder. If you are okay with a roommate or a sublet, then you don't need to worry about this at all. Just build a profile on Flip to show you earn enough money to cover rent, find a sublet, and move in!

What are the financial requirements for guarantors?

Typically, a landlord’s guarantor requirements are stricter than the requirements for a regular tenant. A guarantor is expected to have a credit score of at least 700 (as opposed to the 600 minimum for a tenant). They are also required to make 80-100 times the monthly rent each year, even if they have a lot of assets in the bank.

So, if you plan to apply for an apartment that costs $2,000 per month, your guarantor would need an annual income of at least $160,000.

A landlord may also ask that your guarantor live nearby so that it’s easier to collect rent from them if you default or disappear.

How do I find a guarantor?

Think of people you know who are in good financial standing and who you have a trusting relationship with. Most people go with a family member, but this won’t work if your parents or close relatives have poor credit or don’t make enough money. In this case, your employer may be willing to serve as your guarantor. As a last resort, consider any friends—or friends of friends—who meet the income minimum.

Serving as a guarantor is a risk with no upside, so you might need to coax your relative, employer, or friend into it. Prepare detailed and honest information about your financial status and your employment situation. You want to assure them that you will be able to make rent payments and that they definitely won't need to cover for you.

One way to do this is to prepare your rental application in full and show it to them, even before you've found a place. It should contain:

  • Detailed information about your monthly income and expenses
  • Records from any accounts you have open with financial institutions and proof of on-time payments

A thorough breakdown of your finances will help prove that you are not at risk of falling behind on rent—and make it more likely that someone will agree to guarantee your lease. Instead of putting these documents together on your own, complete your Flip profile. You'll get a full rental application that you can show to a prospective guarantor.

Can I hire a guarantor?

If you want to keep family and friends out of it, you can always hire a company to guarantee your lease. The downside is obvious: you’ll get charged roughly one month of rent in order for them to take on the risk. The upsides are also obvious: you don’t have to ask your cousin to put his life savings on the line so you can snag your dream apartment.

There are currently four companies in the U.S. offering lease guarantee services:

  • Insurent is currently available in New York, New Jersey, Massachusetts, Virginia, Maryland, Illinois, and Washington D.C. The cost varies depending on your financial status, but the fee is typically 75-110% of your monthly rental payment. In return, you'll be backed by a guarantor for one full year.
  • The Guarantors is available in New York and is priced between 4.75-10.45% of your annual rent, which translates to a minimum of 60% of monthly rent.
  • Anchor Your Assets is available everywhere in the U.S. through partnerships with firms in each state. You're required to go through an application process in order to get a personalized rate.
  • Passport Lease is Jetty's guarantor service. Similar to The Guarantors, you will be asked to pay a one-time fee equivalent to 5-10% of your annual rent.

What are a guarantor's obligations?

A guarantor should always be given a copy of the lease they are signing. There will also be a separate guarantor agreement that is signed by the guarantor, the tenant, and the landlord. Make sure that the information in that agreement is accurate, including the monthly rent, start and end dates of the lease, and information on any other occupants.

If you miss a rent payment: Your landlord will contact your guarantor. If they can't get in touch with them or collect the rent, then you'll get evicted. The eviction will appear on the records of both you and your guarantor.

If the rent goes unpaid long-term: If neither you nor your guarantor pay the rent for months in a row, the landlord can also report the debt to a collection agency or take the issue to small claims court. If reported to a collection agency, the unpaid rent will damage your guarantor's credit score.

If your guarantor dies: The unpaid rent would be binding on your guarantor's estate—meaning that the debt is passed on to the person who inherits their wealth from them when they die.

If your guarantor wants to pull out: Until the lease runs out, your guarantor can only get out of their obligation with the landlord’s approval.

Next steps

It’s a lot of work securing a guarantor. Consider finding a sublet instead of getting your own lease—it's easier to be approved for a sublet, and Flip will guarantee your rent using a different set of criteria than traditional landlords.

The information provided on this website does not, and is not intended to, constitute legal advice.

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