Guarantors
What is a Guarantor?
Definition: A guarantor is someone who:
Is financially responsible for the lease
Does NOT occupy the property
Must pay if the tenant doesn't
Important Distinctions:
Term
Occupies Property?
Financially Responsible?
Guarantor (Co-Signer)
No
Yes
Occupant
Yes
Varies
Roommate
Yes
Yes (joint lease)
Co-Applicant
Yes
Yes
Guarantors Allowed
What it controls: Whether you'll accept guarantors at all.
Default Setting: Yes
⚠️ Recommendation: Select "Yes"
Why allow guarantors:
More Approvals: Applicants who fall slightly short on income or credit can still qualify
Risk Mitigation: A financially strong guarantor reduces your risk
Competitive Advantage: Many markets expect this option
Automatic Offering: If enabled, our team can automatically offer a guarantor as a solution when someone doesn't quite meet your criteria
How it works: When an applicant fails income or credit requirements by a small margin, our team will:
Notify the applicant they need a guarantor
Explain what's required
Send them a guarantor application link
Review the guarantor's finances
Approve if the guarantor meets your guarantor criteria
Guarantors Allowed for Income
What it controls: Whether a guarantor can apply alongside an applicant who falls short of the income requirement.
Default Setting: Yes
How it works:
Applicant income: $4,000/month
Required income at 3x for $2,000 rent: $6,000/month
Shortfall: $2,000/month
Guarantor must make at least 4.5x the rent (see below)
Requirement: Guarantors must meet the income level set in "Guarantor Income Requirement" (below).
Guarantor Income Requirement
What it controls: Income multiplier required for guarantors.
Default Setting: 4.5x monthly rent
Why higher than your standard requirement?
The logic: If a guarantor is making 4.5x the rent, they presumably:
Can cover their own living expenses
Have margin to guarantee someone else's rent
Present lower risk of defaulting on their guarantee
Common Concern: "But the guarantor doesn't have enough to pay their mortgage AND the rent!"
Our Response: That's exactly why we set it higher. At 4.5x, they have a better financial cushion to handle both obligations if needed.
Example:
Property rent: $2,000/month
Standard income requirement (3x): $6,000/month
Guarantor requirement (4.5x): $9,000/month
Guarantors Allowed for Credit
What it controls: Whether a guarantor can apply alongside an applicant who falls short of your credit requirement.
Default Setting: Yes
How it works:
Applicant credit score: 570
Required credit score: 600
Guarantor must have a credit score meeting "Guarantor Credit Requirement"
Guarantor Credit Requirement
What it controls: Minimum credit score for guarantors.
Default Setting: 650 (50 points higher than the default 600 applicant minimum)
Why higher than your standard requirement?
Better Credit = More Reliability: A guarantor with stronger credit is:
More likely to honor their guarantee
Less likely to default themselves
More financially stable
Social Pressure: Someone with good credit (650+) has more to lose by letting an applicant default. They're more likely to:
Step in and make payments
Hold the tenant accountable
Protect their own credit standing
Mathematically Possible: Setting guarantor requirements higher than applicant requirements makes mathematical sense - the guarantee can lift a borderline applicant into approval range.
Third-Party Guarantor Services
Question we often get: "What about services like TheGuarantors, Leap, or Rhino?"
Answer: We don't accept third-party guarantor services.
Why not:
These aren't actually guarantors - They're insurance products where the company, not an individual, guarantees payment
Collection challenges - Much harder to collect from a corporation than an individual co-signer
Lease enforcement - You lose leverage when your guarantor is a faceless company
Underwriting differences - These services have their own approval criteria that may not align with yours
What they are: Insurance/surety products, not personal guarantees.
Alternative: If you want to offer this type of product, evaluate it separately from your standard guarantor policy. Some property managers accept these services but treat them differently than personal guarantors.
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