Do you accept Co-Signers on Leases? Why or why not?

[David Socia]

We own several rentals in an area of our town called Midtown Revitalization District. this district is sandwiched between 2 major hospitals and a junior college. All of our rentals are new construction duplexes and our target market is medical professionals "educated with and income". Every time one of our units turns over we have both medical professionals and college students as applicants. to qualify we require the tenants income to be at lease 3x the rent. College students do not meet this qualification and often times ask if their parents can co-sign. The last time we denied a tenant and did not accept a parent co-signer, the mother of the applicant got pretty ugly about it. My thought is that not only do I want to be paid on time for rent each month, but I also want the place to be taken care of. Its been my experience in life that when you don't have any skin in the game you are more likely not to care as much. Am I missing out on a different demographic of renters by disqualifying these colleges students. We typically find the medical professional we are looking for but it may take up to 2 months. Thoughts?

[Andrew Johnson]

David Socia I don't think you can go wrong going down either path. I rent to some portion of undergrads and still don't really have a "bad" experience. But I do have apartments as opposed to homes. And they are 2/2s and 1/1s so if there's going to be a party, it's not at my places. I mean, it could be, but there isn't a spot for a keg stand. I also have units with waterproof Allure floors, etc. so I don't have to worry about thrashes carpet. And we also aren't looking to rent to 4 people with a 2/2. It's a far different dynamic than trying to cram 6 students in a 3/2 to run the equivalent of a rooming house with apartments.

The other reality is that most college students are on a cycle. There's a time of year when they all go out to sign leases for next year. If you miss that window you might not want to wait to get back on-cycle. With your medical professionals, there isn't a cycle. Personally, I like the guarantor of having a parent WITH GREAT CREDIT sign. Odds are their credit is worth more to them than the rent.

So I know this is an odd melange of different opinions but it's a small snapshot of my experience/thoughts.