With graduation slowly on the horizon and as young adults move on to the next phase of their life, you may find many prospects who have no rental history or do not have a good credit score. You may feel uneasy. If this is you, you may want a co-signer.

What is a Co-Signer?

This might not be new information, but a co-signer is a person who signs a lease and thus becomes a party to the rental agreement. Co-signers are equally responsible for the terms of the lease as the actual tenant. No 50/50. Both 100% responsible. In most situations the co-signers does not pay rent. But this depends on the circumstances and determined between the co-signer and the tenant. What matters is that the rent is paid in full and on time.

 

Benefits of a Co-Signer

For the tenant, a co-signer can give the tenant the opportunity to rent a unit of yours. So what are your benefits? You can work with the co-signer to get your rent payments if they are late. Let’s say your tenant is a young adult fresh out of college with the co-signer being their mother. Since you have the mother’s contact information, you can reach the mother and explain the current situation when phone calls and notices to the tenant do not work. The payment arrives shortly afterwards. Of course this won’t be the situation with every young 20-something, but it’s good to have a co-signer to protect yourself.

 

You Should Get A Co-Signer If…

…your prospect suggests it. It is always a good sign of a responsible tenant. It is also additional insurance for your business. You should also get a co-signer if this prospect has no rental history or if they have gone bankrupt. Another name on the lease could alleviate any fears of late payments. A co-signer will always bring in that bit of additional insurance.

If you do decide to get a co-signer, remember to screen them the same way you would do with any prospect. Give them the application, complete a background check – whatever is included in your process. Just because they will act as the co-signer does not mean you can trust them with no knowledge of their history.