Screening process when renting to college students

[Justin Park]

I've had a multi-family rental near Syracuse University that I've rented to grad and law students mostly without incident for the past 12 years. However my last batch of tenants struggled to pay on-time every other month , were dirty and irresponsible. And with all units turning over now for next academic year, I'm trying to be more careful about my admittedly lax screening process.

I've seen several threads on BP about this topic but a lot of conflicting ideas. I have always gotten a parental cosigner as a safety net since many students have no/bad credit, but what do others recommend?

a) Just get parental cosigner?

b) Get cosigner and credit check the cosigner?

c) Get cosigner, credit check them, call student rental references, call student employment references, verify employment, drug test them, take a blood sample, make them pinkie swear not to screw me over, etc.

Basically would just like to hear what other college town landlords to to minimize the risk of a bum tenant during the application period. Thanks in advance for the collective wisdom! Justin

[Roy N.]

@Justin Park

We have student rentals as a substantial part of our portfolio (50 - 60%).

You need to screen your students as you would any tenant.  However, most of them will not have enough life experience to have any significant credit history.

You are on the right track, but I would suggest you use a guarantor rather than a co-signor.  A co-signer to the lease is a tenant in common and has all the rights of a tenant (including right of access).  Having parents as co-signors can lead to housemate tensions and helicopter parent issues for you.

What we do is have the student bring a guarantor to the table - typically a parent or grandparent.  We obtain a signed consent form from the guarantor to pull their credit history and verify their employment income.  If the guarantor is a successful candidate, then we execute a separate guarantee agreement with the guarantor whereby they assure the financial obligations of the tenant (the guarantee).  We then attach the guarantee agreement(s) as a Schedule to the lease.

The guarantee agreement provide the guarantor with the right to be informed if Little Johnny (and his friends) are not meeting their financial obligations and the responsibility to pay those obligations.  No other rights are afforded to the guarantor.