Fellow landlord's opinion?

[Aaron Millis]

Hi BP,

I am screening tenants for my college rental that will be available in the fall. I have a 4 bedroom house that I rent by the bedroom. I'm looking into 1 of the 4 potential tenants and see that his income comes up short of my '3x the rent" rule. I told him he could use a guarantor which is common here (typically the parents). He said his parents make plenty of money but they recently filed for bankruptcy and asked if I could still count them as guarantors. 

I asked him how recently this happened and I'm still waiting to hear back. But this is my first time running into something like this so regardless of his answer I'm not sure the kind of weight "recent bankruptcy" has. 

Any advice or opinions are welcome. Thanks.

[Thomas S.]

The parents are not acceptable as guarantors with a bankruptcy. If you require a guarantor you will need to pass on this applicant. You should always have parent guarantors for all students since none have permanent employment.

However what you do is require that each student be fully responsible for the entire rent. You rent the house to the group collectively making all responsible for the entire rent. You would receive one rent check and they deal with collecting the rent and utility costs among themselves.  It becomes their problem if he defaults not yours. Unfortunately if the place is destroyed only the parents of the three good tenants will be held liable.