There is good reason to try and get your tenants to appoint a Rent Guarantor.
And that is to make sure you get paid your rent, even if the tenant defaults and wont/cannot pay. It’s a way of guaranteeing your rental income, and that’s good news.
So what exactly is a Guarantor?
Simply put, a Guarantor is someone who agrees to be responsible to cover the rent if the tenant cannot or does not pay. In some cases the Guarantor also agrees to cover damages to the property.
The requirement for a Rent Guarantor is becoming increasingly used by landlords who are often dismayed at losing hundreds, if not thousands of pounds in rent arrears. It is not a comment on the tenant’s status, or an indication of a lack of trust, simply an effective business solution.
Finding someone to act as a Guarantor is the difficult part of the process! There are several requirements that a Guarantor must meet such as:
- Be between the ages of 18 and 75
- Have a good credit history
- Be able to afford to pay the tenants monthly rent
- Be a UK resident
Now, many tenants turn to their parents, but as you can see, they might not qualify, or even want to take on that potential burden, but they are still the number one go to choice of tenants, especially young couples starting out.
That leaves older tenants, working professionals or students from overseas struggling. You don’t want to be unknowingly discriminating against a particular type of tenant, especially as some of them are just the sort of clients you want. Working professionals in particular.
You can rely on referencing upfront to help you to a certain extent, however it doesn’t take into account changes in circumstances later on. That perfect working couple could both get made redundant 6 months later.
You could charge 6-12 months up front instead, but then you might price tenants out of your market.
So, what is the best solution?
Ezylet run a fantastic Guarantee service for tenants. Details are here: www.ezylet.com/rent-guarantor
But look at who qualifies:
- Tenants renting a property for 12 months
- Students from the UK and Abroad
- Anyone in employment (full or part time)
- People with a poor credit history od CCJs
- Tenants on Housing benefit and working part time
As long as their take home pay is 1.5 times the rent, they should qualify. It costs you as a landlord noting as the tenant pays.
It offers peace of mind for both them and you.