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Guarantors are financially and legally obligated to pay your rent if you fail to pay.
Anytime you might not meet the landlord's requirements, a guarantor may be required. For example, if your income isn't 40 times the monthly rent, if you have bad credit, or if you have no rental history, a guarantor might help you qualify. Now, not all landlords allow guarantors, so make sure you ask about this before you visit the apartment.
Guarantors are required to make at least 80 to 100 times the monthly rent. (If your rent is $2,000 per month, a guarantor needs to make $160,000 to $200,000 per year.)
Asking a rich friend or relative to be your guarantor can be excruciating. To help you out, we've written a sample guarantor letter with clear instructions that you can use. The more details you provide the potential guarantor, the easier the process might be.
A guarantor needs to provide the same documents as a renter: two pay stubs, two bank statements, one or two tax returns, and a letter from his or her employer. If the guarantor owns his or her own business, a certified public accountant (CPA) must provide a letter stating the guarantor's income.
No matter how close your relationship is, your guarantor won't want to share his or her financial information with you. The guarantor can instead send the documents directly to the landlord, but the landlord will want the documents right away.
Landlords prefer and sometimes require guarantors to live in New York, New Jersey or Connecticut. (It's cheaper to track down someone in the Tri-State area when collecting a missed rent payment!) But some will work with out-of-state guarantors. You'll need to ask about this.
Typically you can't have multiple guarantors that add up to 80 to 100 times the monthly rent. Landlords want one person as a guarantor. (Collecting missed rent payments from more than one person is way too complicated.)
If you need a guarantor but don't have a rich uncle with a sack of gold, try Insurent, a guarantor service. Insurent requires an income of 27.5 times the monthly rent and a good credit history . To act as your guarantor, they'll charge you 75 to 80 percent of one month's rent upfront.
As you may know, I'm looking for an apartment in New York City and was hoping you could help by acting as my guarantor. You would basically tell my landlord that if I fail to pay rent, you will pay instead. Because the NYC rental market is so competitive, and because landlords almost always have more than enough qualified applicants to choose from, they're forcing very strict requirements on renters. As it stands right now, I can't qualify to rent an apartment without a guarantor.
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Income too low
Landlords require that a tenant's pre-tax yearly income is at least 40 or 50 times their monthly rent. For example: if rent is $2,000 per month, the tenant's income must be at least $80-$100,000. Given that NYC rents are the highest in the country, I likely won't meet this requirement.
Credit too low
Landlords are looking for a renter with a credit score that's higher than 700 and unfortunately mine is too low to qualify for an apartment on my own.
No rental history
Renters without any previous history renting an apartment - students, foreign citizens, recent grads - are considered risky tenants. To make up for that risk, landlords want a guarantor.
Gurantors from NY or the Tri-State area
Many landlords are only accepting guarantors who live in NY or the Tri-State area, which is why I'm asking you.
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If you are willing to act as my guarantor (thank you!) here are the key points to know:
A guarantor's pre-tax yearly income (salary, dividends, etc) must be at least 80-100x the monthly rent. The landlord will need a lot of documentation:
- Copies of last two pay stubs
- Copies of last two bank statements
- Copies of last two tax returns
- A letter from an employer, or certified public accountant, verifying income, bonuses, title, and length of employment
- Social security number (to run a credit check)
This is your private information. So that you don't share it with me, you'll send the documents directly to the landlord.
Apartments fly off the market, and are sometimes only available for a few hours. If a landlord has to wait on collecting documentation from a guarantor, there's a good chance they'll choose another tenant.
If you think you can help, I will be eternally grateful! But I'll also completely understand if you're not comfortable doing so. And if you're curious, here's an article about guarantors from The New York Times: http://www.nytimes.com/2010/11/30/nyregion/30appraisal.html