The Search

No co-signer for your rental? No problem—try these 6 guarantor work-arounds

By Emily Myers | August 12, 2021 - 9:30AM 

If you don’t have a relative or friend who can step in as a personal guarantor, you still have some options.

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To rent an apartment in New York City, you need to demonstrate that you can reliably pay your rent, usually with a combination of good credit and an annual salary of 40-45 times the monthly rent. If not, you'll need to find a co-signer—someone who will be on the lease with you and therefore fully liable for any unpaid rent—or a guarantor who agrees to pay the rent if you don't. In New York City, co-signers and guarantors are generally required to have a credit score of at least 700, an annual income of 75-80 times the monthly rent, and often must reside in the tri-state area (New York, Connecticut, or New Jersey) to be within easy suing distance if something goes wrong.


[Editor's note: An earlier version of this article ran in August 2019. It has been updated with new information for August 2021.]


Many renters look first to their parents or other older relatives to serve as guarantors. If they're retired or lacking a steady income, they likely won't be acceptable to a landlord. While friends or employers can also guarantee a rental, non-relatives are frequently reluctant to shoulder the financial liability if you or a roommate defaults.

In lieu of a guarantor, it used to be possible to pay several months of rent in advance.  This used to be an option for those with shaky credit or lower incomes who had money in the bank. This option was taken off the table a few years ago with the passage of major tenant protection laws aimed at reducing the upfront costs of securing an apartment in New York. It’s now illegal for a landlord to take more than one month’s rent in advance.

Here are 6 options to explore if you can't find a guarantor or co-signer:

1. Hire a third-party guarantor

If you don’t have a family member or friend who can act as a guarantor or co-signer, you can pay a third-party guarantor to take on that role. Third-party guarantors have income requirements that are significantly less strict than landlords' 40x rent rule and are accepted by thousands of buildings across the city—a trend that accelerated during the pandemic. 

"We're seeing an increase in third-party guarantors to levels we've never seen before," says Adam Frisch, managing principal at Lee & Associates Residential NYC, a management company representing small building owners in Manhattan. Buildings with high vacancy rates are more willing to accept lease guarantor companies as a concession to renters, and as less affluent areas recover, third-party guarantors are going to remain a fixture. "It’s a change that’s here to stay," Frisch says.

Pro Tip:

If you need a third-party guarantor because you don't earn at least 40-45 times the monthly rent—or if you’re an international employed person, self-employed, non-employed with assets, retired, or an international student or US student—Insurent Lease Guaranty is a quick and easy way to get the apartment you want.  You'll pay a one-time fee of around 70 to 85 percent of a month's rent, or 90 to 110 percent of a month's rent if you're international with no U.S. credit. Insurent Lease Guaranty is accepted by more than 4,700 buildings across New York City representing over 475,000 apartments. Click here to learn more.

2. Offer to pay a higher rent

Paying a higher rent might be difficult to stomach but it may encourage a landlord concerned about the risks of renting to you if you have no credit history.

It is not unheard of for renters to offer to pay a higher rent in order to secure an apartment. There have been recent reports of some renters facing bidding wars for apartments—with landlords raising the rent after a busy open house or even renters offering to pay more than the asking rent to beat out the competition in some of New York’s most popular neighborhoods. 

It’s also possible renters may find that an advertised rent goes up in response to an applicant’s credit history.

Frisch says this is something renters will likely see more of in the future. “Someone who just graduated and doesn’t want to—or can’t—use their parents as guarantors, we will let them take the apartment for an extra $100 in rent,” he says.

3. Opt for a sublet (or become the new roomie)

There are definite pros and cons to living in a place where your name is not on the lease, but one major "pro" is you might not have to go through the qualification gauntlet. There are plenty of places to seek out a sublet set-up, including online forums as well as sites that act as marketplaces for short-term rentals. If it's a roommate set-up you're in search of, there are lots of sites out there that'll help you find a spot.

Pro Tip:

Don't have a guarantor? The rental experts at Triplemint, a Brick Underground partner, can help you navigate the market and find a great apartment to rent without one. Sign up here to take advantage of Triplemint's corporate relocation rate—where you'll pay a broker's fee of 10 percent of a year's rent on open listings instead of the usual 12 to 15 percent. Bonus: The agents at Triplemint are a delight to deal with.

4. Go with a co-living company

Co-living offers the convenience of a furnished apartment with staples in the pantry and ready-made roommates—all for one monthly payment. Many companies vet tenants the same way traditional landlords do, with background checks, and credit and income qualifications, but you may find some are more flexible than others. 

These days, you’ll find the emphasis is off group activities and networking events and on flexible lease terms, which are very much in demand. Some co-living companies are even offering shorter-than-usual leases.

One important consideration, however, is the legality of the operation. You don’t want to find your unit abruptly shut down as happened to hundreds of tenants two years ago. You should know it’s illegal to rent a single room in a co-living space—all roommates need to be on a lease. You'll also want to do some due diligence on the company to make sure it is legal and the unit is properly set up for fire safety. Basement and windowless apartments are not legal—or safe.

5. Get insurance that guarantees your rent

A relatively new kind of insurance will pay your rent if you lose your job. It's called rent guarantee, and it is considered job loss protection for which you pay a monthly fee. Rent guarantee insurance is typically obtained by landlords, so you may start to see it mentioned in listings. Landlords can roll it into the monthly rent, and if you're asked to pay for it, it needs to be spelled out in the lease. 

Keep in mind that by guaranteeing your rent, you lose your ability to withhold rent if a landlord isn’t fixing things, which is important leverage over a negligent owner.

6. Shop around for the right landlord

This can be tough in the already-exhausting process of apartment hunting, but especially in the winter months when the market is slower, you'll have a better chance of finding a landlord who is willing to work with your particular set of circumstances. Be upfront with your broker and the landlords you contact about your situation. 

—Earlier versions of this article contained reporting and writing by Virginia K. Smith.

 

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