Home Buying in 95391>Question Details

Mtnrent, Home Owner in 95391

What are the risks for renting a place to tenant who does not have credit history and brings co-signer who would be responsible on lease agreement?

Asked by Mtnrent, 95391 Sun Feb 24, 2013

That co-signer would not be staying in the property. Only the tenant who does not have credit history would be staying in the property.

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Bad credit shows the truth of the possible tenants.
0 votes Thank Flag Link Sun Jan 19, 2014
The risk is that they don't pay. Just as with any tenant. Having a co-signer will allow you to collect from them should the tenant not pay. Make sure that the co-signer does have good credit or you may have problems collecting. As for the deposit CA law will only allow you to collect 2 times the rent amount, more if the place is furnished. So if your property is renting for $1000 you should collect $2000 for a security deposit. Do not call it last months rent because that would be all you could use it for. If damages exceeded the deposit you would have to try to collect it and could not use the "last months

I am a Realtor as well as a Certified Property Manager. We manage over 200 properties in Tracy, Mountain House, Livermore Dublin and Pleasanton. If you have other questions regarding a rental property please feel free to call me.
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0 votes Thank Flag Link Sun Feb 24, 2013
Co-signers are common, especially with college students and immigrants who have yet to establish a credit history. Just make sure the co-signer is qualified to rent your property with their residence and other expenses taken into consideration.
The best protection is a large security deposit, but make sure you check local regulations. Some California counties and cities put a cap on the amount of security deposit you collect and may allow you to collect only the first rent and deposit, no "first and last" rents.
0 votes Thank Flag Link Sun Feb 24, 2013
There could allows be risk regardless of good credit, when it comes to renting. You should have a credit company that specializes in pulling a back ground & credit report check from anyone that is applying for your rental. These companies charge a fee per applicant. If there are two renters that will live in your unit pull two credit & back ground checks. Kids do not apply. You charge a non fundable fee for this credit & background check report. There is also a application that you must use that allows you to run there credit and background check. You must also give this report that you run to the applicants as well.
When your tenant has no credit that is better then bad credit. However the co-signer would be the Guarantor of the lease and if something would go wrong, then the Guarantor would be responsible for the lease. Same as a renter would be responsible.
You need a well written lease that covers above. You can have your attorney draft a lease or just hire a realtor and their office and or MLS would have a good lease application for you. It is worth he peace of mind.

Hope this helps.

Call me with any further questions that you may have.
0 votes Thank Flag Link Sun Feb 24, 2013

1. Damage to property
2. Late with Rent or non payment at all

Nothing is 100% certain, however, there are steps you can take to help guard against this situation.

1. Be sure the co signer has excellent credit on all levels
2. Be sure to get First month, Last month AND Security deposit

These steps will help protect you against the risks. Hope this helps.

Shaun Zamrykut
0 votes Thank Flag Link Sun Feb 24, 2013
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