For NYC apartment-seeking tenants who have less-than-perfect credit or whose income fails to meet the landlord's requirements, you may find that some landlords will accept a guarantor to minimize the risk of rent default. A guarantor is a person who agrees to be financially responsible for the rent if the tenant is unable to pay it.
When a landlord requires a guarantor, the tenant must provide the landlord with the guarantor's personal and financial information. The guarantor will also be required to sign the lease and a guarantor agreement, which outlines the terms of their financial responsibility.
Typically, the guarantor will be required to have a good credit score and an annual income that is at least 80 times the monthly rent. So, for example, if the monthly rent on an apartment is $2,000, the guarantor would need to have an annual income of at least $160,000.
By providing a guarantor, you may be able to secure the apartment that you want, even if you don't have a perfect credit score or a high income. Just be sure to carefully review the terms of the guarantor agreement and make sure that the guarantor is comfortable with their financial responsibilities.
You'll want to make sure that you understand exactly what is expected of the guarantor and what their financial obligations will be. Additionally, you'll want to be sure that the guarantor is comfortable with the terms of the agreement and is willing to take on the financial responsibility.
Third-Party Guarantors
But what if you don't have anyone who is willing or able to act as your guarantor? In this case, you may be able to use a third-party guarantor. A third-party guarantor is a company that acts as a guarantor on behalf of the tenant. This can be a useful option for tenants who don't have a friend or family member who is willing or able to act as their guarantor.
To use a third-party guarantor, the tenant must provide the landlord with the third-party guarantor's contact information. The third-party guarantor will then be required to sign a guarantor agreement, just like a personal guarantor would. The terms of the agreement will be the same as if the guarantor were a friend or family member of the tenant.
Third-party guarantors can be a useful option for tenants who are unable to find someone to act as their personal guarantor. However, it's important to note that using a third-party guarantor may not be as secure as using a personal guarantor. This is because a third-party guarantor is a company, not an individual. If the company goes out of business or is unable to fulfill its financial obligations, the tenant may be left without a guarantor.
So although third-party guarantors can be a useful option for tenants who are unable to find someone to act as their personal guarantor, it's important to carefully consider the risks.
Make sure that the third-party guarantor is reputable and able to fulfill its financial obligations.
Reginald Richardson is a licensed real estate professional in New York City who enjoys reading books by Octavia Butler, listening to Afro-house music and following the Brooklyn Nets. He also is a founding member of the Skybridge Group of VORO Real Estate.
