Tenant guarantors are or at least they should a landlords insurance of sorts. Should a tenant fail to fulfill their lease agreement there always will be someone whom the landlord will expect to pay whatever is owed. Many landlords however never ever mention that a guarantor would be great for both parties. Having a guarantor lessens the risk of tenants failing to pay their rent or damaging property. Why do you think most landlords never make it a condition that the tenants should have a guarantor? Are they afraid tenants wouldn't like this?
Tenant guarantor is not customary here and I guess that would be out of ordinary so tenants would not agree. But that's a good method for the landlord's security since their perennial headache are delinquent tenants. We rented an apartment in 1994 for 2 years and also rented a house for 5 years. As a tenant, we also understant the plight of the landlord so we fully cooperated with the agreement. And when we left, we surrendered everything. In return, the landlord gave back our deposit in full.
Well when we had our house rented out few years back, we never ever thought of requiring that our tenants should have guarantors. We have had experiences of tenants not being able to pay their due rents and whenever those situations happened, we would usually give them lee-ways before deciding if we have to make them leave. I think that's the importance of having deposits and advances so the landlord wouldn't lose much in the process that the tenant is not able to pay his/her due rent.
I'm a bit 50-50 on this. I do understand why some landlords ask for it, it makes sense. But for the potential tenant... it might not always be so easy to find someone who has enough income to be a valid guarantor and is willing to sign a paper saying that they will pay anything that the tenant doesn't. I know I would be really careful about signing a paper like that since it's legally binding, even if I trusted the tenant I was guaranteeing for.
Am just thinking...won't that put a damper on tenants wanting to move into my property hence put a damper on my business?...am thinking that would work well with someone renting out to the well-oiled, well-heeled type of crew...but thanks for giving me something to think about.
In fairness to this thread, the advanced and deposit are not guarantees that the tenant will not be delinquent. Over here, the advance is normally 2 months of rent and the deposit is one month to cover damages, if any, when the tenant is leaving for good. On the part of the landlord, it is a good idea to have guarantors although as I said in my previous post that no one is doing that here. But it really made me ponder on that issue because in a few years time, I would build my own apartment and rent it out.
I personally would not touch a tenant who needed a guarantor. They should be solvent and have a good credit record, and sign a lease that allows prompt eviction in the face of non-payment. Then there is no need for anything to be guaranteed. Even if you have a guarantor the odds are you'll have to drag them through the courts to see any actual money; it is so not worth the stress. People who have paid their bills in the past will probably continue to pay them in the future, those who haven't will be tenants from hell.
Last night I was talking with my husband and our dream of an apartment was mentioned. He said that the best tenant is one with a stable income like an employee of a big company. When I asked why, he said that if the tenant is employed in a big company then that company can serve as a guarantor in a way, not directly though. It can be arranged that the company would be paying for the rent as part of the benefit, there are companies here that provide housing assistance. I just nodded because the planned apartment is still a long way to go.
I would be more than happy to take a tenent with a guarantor, depending on the circumstances. People get a bad credit history for a lot of different reasons and sometimes I've found it's them that are the most reliable because at the end of the day, they know if they don't pay their rent, they won't have a place to live.
People who acted according to that logic would not have ended up with terrible credit on the first place. The best predictor of future behavior is past behavior -- that is why it is almost always better to take the applicant with good credit over the applicant with bad credit. If you can only attract applicants with bad credit then there are other things you can do to make selections, but I would never get into that, given the choice. Bad credit means debt on most cases and you don't want to be the next one on the queue as a debtee. I am sympathetic to people who have problems but I entrust my assets to and derive income from people with good incomes themselves, and a good bill payment record at least for the last 5 years. This is business after all. I am not going to take someone's word that now they will stop defaulting.
