When To Get A Co-Signer In Park City Property Management
In the search for a tenant in Park City property management you may come across a tenant who is lacking in either rental history or an acceptable credit score. This of course assumes that you are using your already established method for determining a tenant's qualifications. If you would like more information on that subject you can check out "5 Ways Tenant Screening Helps - Park City Property Management." But for the sake of today's blog let us assume you've already got that aspect of your Park City long term rental operation dialed and are considering renting to someone who has a deficiency in the previously mentioned areas. One good way to protect yourself is with a co-signer.
What Is A Co-Signer?
As most of you are aware a co-signer is a person who willingly signs their name on a lease and becomes a party to the agreement. A key for understanding co-signers is the idea that anyone who signs on a lease is wholly and equally responsible for the terms of the lease. There is no 50/50 split or anything of that type. If there are two parties they are both equally responsible for ALL the terms of the lease. Typically a co-signer does not actually pay rent for a property but again any type of arrangement between the co-signer and the person residing in the property is up to them. The important thing to know is that both parties agree to pay the full rent every month.
When A Co-Signer Helps
I had a tenant several years ago who had less than adequate credit. I decided to take him on with the condition of having a parent co-sign on the lease. That turned out to be one of the best decisions ever. The tenant was frequently late on rent payments and generally avoided my phone calls and notices after the 5th of the month when rent was late. But a simple email to his mother and either he would be right in to pay or a check from mom would be in the mail. After a year lease I elected not to renew to the tenant as chasing down rent payments is tedious and I had no desire to keep myself in the middle of a parent/child dispute. But in this instance a co-signer was all that kept the tenant from being evicted.
When Should You Get a Co-Signer?
First, it a potential tenant willingly volunteers to have a co-signer you should definitely take them up on it. It may be that nothing goes wrong but a co-signer is a little bit of additional insurance for your Park City property management operation. If a potential tenant is just starting out on their own you should require a co-signer. Most people of this age still have some dependency on their parents and asking this of a first-time renter is not unreasonable. I have also asked for co-signers of people who recently went through a bankruptcy. Having verified income helps but again that extra bit of insurance a co-signer brings can alleviate concerns about a potential tenant. You should always run a co-signer through the same process you put every potential tenant through. They should fill out your application, have a credit and criminal background check run, and verify income.
If you would like more information about tenant screening and co-signers, or further information about Park City property management in general click the link below for a free consultation. You will receive valuable information specific to your property that will help you make an informed decision. You will also receive a free, no-obligation quote on our property management services. At CC Realty we specialize in making investment property ownership a trouble free experience. Please contact us today for your free consultation.
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