What You Need to Know About Rent Guarantors

Guarantors. Who needs ’em!

Well, you might if you want to get a NYC apartment and don’t make 40 times your monthly rent in annual salary. What do I mean? Well, say you’re looking to rent an apartment with friends for $2,000 (for the entire place). $2,000 x 40. . . that’s a slick $80k. Yowza!

Wait you say, you plan on splitting that by three and hanging a sheet in the middle of the living room so it SHOULD only be like $666 x 40, right? Way more do-able!

Alas, most landlords and/or brokers don’t work that way. My landlord was over this weekend fixing the clogged bathroom sink so I used that bonding experience to ask him WHY that couldn’t work. WHY this heartbreaking practice was in effect.

Turns out landlords are kinda nervous about getting paid. They get  squeemish when they think tenants are stretching to make rent so they enacted the 40 times rule. Turns out — they don’t care which roommate pays up as long as they get their $$.

Personally, I still think its over protective, but I’ve also never had to take anyone to court or evict them due to a failure to pay rent.

So, if you, like many of us don’t make that bank you need someone who does to co-sign, basically guaranteeing that you’re good for the money. Often not just for you but for the entire apartment, by the same logic as above. And in the worst case the guarantors have to show they make 80 times the rent, because, presumably, they have  to also cover their own housing expenses somewhere else.  And they may even have to prove their income with tax returns.

It’s an uncomfortable, prohibitive process — one that does not favor young upstarts trying to make a life for themselves without help from back home. I knew last year, when I had to ask my mom  for her help, how lucky I was that I had someone to turn to — and still do. It was embarrassing — but I’m writing this post from my first choice apartment. And, like I’ve been doing for years already, I’m continuing to pay my own rent.

So, in essence, while it may seem like you’re losing your independence by getting a guarantor — it really doesn’t have to be anything more than a piece of paper between you and your broker/landlord. That is. . . unless you don’t make the rent!

P.S. Moms/dads, it you are reading this — you WILL have to give the broker your social security number. It’s scary, but they need it. Really.

P.P.S. Sometimes money talks louder and your  landlord may skip the guarantor requirement if you are able to pay several months of rent in advance.

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Author My First Apartment

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I've lived in apartments in 6 cities (including 2 foreign countries). Does that make me an expert? As of now, my ceiling isn't leaking and I don't have rodents (knock on wood) -- so I'm going to say yes . . . but ask me again tomorrow:) These days, I'm enjoying life Chicago style, but my years in Brooklyn are never far from my mind. P.S. By day I work at Cars.com, but these opinions are totally, 100% my own.

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Comments (9)

  1. Avatar JW

    I’m currently doing to apartment hunt in San Francisco. My friend and I are looking for a place and have been using my parents as a guarantor in all our applications. We haven’t gotten a place. Finally a rental agent was kind enough to inform us when we asked for a guarantor form that having a guarantor actually hurts our application and that if anyone applies that doesn’t need a guarantor, they will get the place. So that sucks. And offering to pay months in advance doesn’t work with housing agencies because they don’t have anyway to hang on to the money (that is appealing to landlords/owners, but in San Francisco, you never actually are dealing with them; you are always dealing with an agency which is only interested in how you look on paper).

    • Alissa Alissa

      Hi JW –

      That’s strange…mainly because I’m surprised that with San Fran rent, so many renters don’t need guarantors. I’d try to either find the individual landlord (through friends/word of mouth) or do some street canvassing. Otherwise, keep your head up! It’s not ideal to have to use a guarantor, but it can be a necessary evil in a crowded rental market. I might also try a different agent, as landlords usually only get to consider one offer at a time and, therefore, should just be considering you vs yourself, if you know what I mean? Good luck!

  2. Sisko Sisko

    Here’s a link http://nyti.ms/f2uaHU to another article about guarantees. It seems some landlords in NYC now require that guarantors live in the region, which makes it more difficult for people moving from out of town. The girls profiled were able to get around the requirement by having parents put several months of rent into escrow.

  3. Alissa Alissa

    Hi Julie,

    Unfortunately, you likely won’t be able to include such an addendum. Landlords just want to make sure that their rent is covered — and don’t really care who is doing the covering. Both parents will have to agree to cover the entire apartment. I’m sure you and your future roommate are responsible though, so you shouldn’t have a problem long-term!

    Sorry I don’t have a better response,

    Alissa (MyFirstApartment)

  4. Avatar Julie

    I am in the process of signing a lease with my roommate with our parents as guarantors. Since our parents don’t know each other, they want an addendum stating that they are only responsible for their own daughter’s rent and utilities. How should this be worded?

  5. Avatar Carolina

    Wowsers! I’m glad I don’t live in NY! Most places here don’t have any actual income ‘guidelines’ in place, although my complex does. However, it is only FOUR times the rent. My boyfriend’s old place required an income 3 times the rent (he just bought a condo, so he’s feeling great now!) Anyway, I cannot BEGIN to imagine having to earn FORTY times your rent. I’m absolutely positive that there are NO rentals with that requirement in AZ. It is probably against the law…and it should be. The ‘rule of thumb’ that I was brought up with was that rent (or mortgage payments) should NEVER be more than 1/3 of one’s NET earnings. But, apparently most people in NY are forced to live far below their means if they wish to rent? This simply makes NO sense to me. My mind is not wrapping around that. It “does not compute”. I would have to live in a dump were that the rule here, as I don’t know anyone who could co-sign for me. I really feel sorry for you guys. (BTW, my rent is $1,600 per month here, but I get a LOT for my money. It’s like a resort, and I LOVE it! Plus, it’s HUGE, large enough for 2 people (at least)if I ever, for some reason, needed a roomie. You guys should move here! They have even larger units, big enough for 4 people, for just over the price you quoted!) With every amenity you could dream of. And, they DO consider the income of each person on the lease.

    • Sisko Sisko

      Hi Carolina,
      Thanks for your great comment. It pointed out to us how we missed one crucial detail in the post. The 40 times salary requirement refers to annual salary, not monthly salary. NYC is tough for renters, but even here the landlords are not totally unreasonable. So, if AZ renter’s income guideline is 3-4 times your monthly rent, it works out to 36-48 times in annual salary, in the same range as the NYC number.

  6. Avatar Donna

    It depends on what the lease says about the guarantor’s obligations. The Guarantor clause in NYC residential leases typically includes the following provision: “the Guarantor further agrees that his guaranty shall remain in full effect even if the Lease is renewed, changed or extended in any way….” If your lease includes this provision or a similarly worded provision, the guarantor’s obligations would remain in effect even though the guarantor did not sign the “addendum” or see it. (I’m assuming that the “addendum” was legal and complied with terms of the lease for making changes to the lease.)

  7. Avatar Sisko

    Leslie has emailed a question: “If the renter signs an addendum but the guarantor doesn’t see it or sign it are they responsible or is it enforceable?” Can anyone provide an answer?