Renting your first apartment is a life-changing experience for many people. As a renter, you’re out on your own with nobody to tell you to clean your room or tell you what to do. The problem for many first-time renters is not only proving income but also providing stable rental history. After all, how are you supposed to provide rental history if this is your first apartment home? Luckily for you, that is where a co-signer for an apartment comes in.
Now an apartment you couldn’t afford or wouldn’t be approved for might be in reach. After all, there’s a current trend towards renting compared to buying.
What is a co-signer?
A co-signer for an apartment accepts full financial responsibility for paying rent on the apartment in case you don’t. Although they don’t have to live in the apartment, they will have to pay the rent in lieu of the renter not fulfilling their end of the deal.
They will sign the lease though, and maintain renter privileges. If the landlord is unsure that you are able to rent, or you don’t meet the income requirements, then this is where a co-signer comes into play.
Who can I ask to co-sign for my apartment?
The reason you will need a co-signer for an apartment is that your landlord doesn’t trust that you can pay the rent on your own. The good news is that for each and every apartment after this one, you probably won’t need the assistance of someone else to help you qualify for the new place.
The person you pick should ultimately be a close family member or friend who trusts you. This person should also have a strong financial record. This means they own a home or have strong credit and a record of paying bills on time. If you choose the wrong person, then your application will be denied.
Remember that this person will be risking their personal credit if they decide to sign on with you. If you fail to have the funds to pay, the landlord or apartment manager will be coming after the co-signer next.
What are the benefits of a co-signer if you are the renter?
1. You don’t need strong credit to get approved
Maybe you have never rented an apartment before, or you are recovering from lavish spending and haven’t been able to pay your bills. Although you still might be a valid candidate, an apartment manager might not see it this way. But by bringing in a strong cosigner with strong credit, you can start growing your credit again and live in a newer apartment!
2. Even People with Evictions Can Find a Place
An eviction is probably one of the scariest items on your credit history when you’re trying to get approved for a new place. It might have been your inability to pay rent; or continued violations in the apartment complex. But you might be able to increase your opportunity for approval if you have someone backing you.
We recommend that you be honest with the co-signer about your previous rental digressions. That way they can make an unbiased decision if they want to back you.
3. First Time Renters Shouldn’t Have a Problem
If you are renting a place for the first time or you have just graduated from your university, you won’t have a rental history. This is totally understandable. A property manager will feel more comfortable renting out a unit to you in the apartment complex. After you are approved, you won’t have to go through this again!
What are the cons for the co-signer for an apartment?
With pros always come cons. A cosigner is probably going to be a great friend, family member, or parent. If you can’t come up with the funds to pay your rent on time, they will be left with the bill. If they choose not to pay, then you will be faced with a potential eviction. This will go on your credit report and on theirs. This will most likely damage your relationship with that person for years to come.
If you don’t want to take that risk, then other routes are available. Co-sign services are available. You pay an upfront fee. Just remember you will be contractually obligated to pay back the company if you fail to pay the rent.
What are the pros of having a co-signer if you’re the landlord?
There are many reasons why you should consider co-signers. First of all, with this flexibility, it opens up the number of renters who can apply and be approved to live in your place. At the end of the day, you just want to get paid on time. Plus, you don’t want to worry about your tenants not paying their rent on time. A college student might be the perfect example. They haven’t had time to build up their credit and rental history because they have been living with Mom and Dad their whole lives.
But if you allow Mom and Dad to co-sign, then you have the assurance that rent will be paid.