When managing a rental property, there’s always a chance of running into a prospective tenant that seems like a great fit, but doesn’t fully meet your criteria. You could move forward with other applicants, but this can result in longer vacancy periods depending on the time of year, the market you’re in, or the number of serious applicants you’re considering.
So what are your other options? You can require a lease guarantor or co-signer that meets your requirements for tenants that are either renting their first apartment or have a little to no credit.
In this article, we outlined the differences between a guarantor vs. co-signer, how to screen them, and how to get a free application template with Avail.
The terms lease guarantor and co-signer are often used interchangeably, but they’re two different types of individuals that can be added to a lease agreement.
A lease guarantor is a person — typically a parent, family member, or close friend — that takes on the financial responsibility of covering rent payments if the tenant is unable to pay themselves. They act as a back-up plan for landlords, especially if the tenant they’re renting to has a low credit score or does not meet the income requirements on their own. Since a guarantor is not considered a tenant, they are unable to live in the rental property during the lease term.
On the other hand, a co-signer is considered an additional tenant that’s allowed to occupy the unit with the original tenant. Co-signers can be a family member, a roommate, or a partner who are looking to split rent payments, pet fees, and the security deposit fee with the original applicant. They’ll most likely be occupying the space during the lease term, meaning they hold the same responsibilities as the other tenant and need to pay rent by the set move-in date.
There is no clear preference between a guarantor and co-signer considering they serve different purposes on a lease agreement. Instead of solely committing to one option, you can create two lease agreement templates — one for tenants that needed a guarantor to get approved and another for tenants that will be sharing the space during the lease term so you’re prepared for either situation.
