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Helping my daughter rent an apartment - guaranteeing the rent

klpca

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Somehow I managed to avoid this with my other two kids, but kid #3, a college junior, is renting an apartment next year with two friends. She works, but we have to help her with housing costs. She has asked us to guarantee the rent. We're fine with that - the friends are trustworthy and we are willing to assume financial responsibility.

They are looking at a number of rentals and the competition is kind of stiff. She just called to get some financial information from us to fill out the applications. She wanted SSN, monthly income, bank account balances, and monthly mortgage. Each property manager is also going to run a credit check. While I understand the need to verify the credit worthiness of a co-applicant, I am not comfortable putting this information on I don't know how many applications, plus having multiple credit inquiries in a short period of time.

Any practical advice on how much information they truly need? I'll admit it, I don't want to give my income information or our account balances to our 20 year old daughter. She thinks that we have to pinch every penny and I want to keep it that way. We are also looking at buying a second rental property so I am also nervous about those credit inquiries and qualifying for a loan on the income property (although our mortgage broker told me not to worry about getting a loan). Our credit score is probably high enough to take a few little hits (high 700's) but I don't know if we'll get dinged on "too many" inquiries. Any thoughts on how to proceed?
 

am1

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It does not matter if the friends are trustworthy. There are many situations where they had good intentions of living there for the year but things change. Are all 3 parents applying for the apartment.
 

klpca

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Yep. I know that, unfortunately. Hopefully it won't come to that. But on the bright side, rent is almost half the cost of the dorms.

When I write out the last check for tuition next year it's going to be like getting a raise. Glad we're almost done with that expense.
 

Talent312

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How about saying: "Once you settle on a place, you and your friends put your info on the application, send it to me, and we'll mail it back to the manager." Or... "Give me the name+number of the manager, and I'll deal with them directly."

One strategy that we used once was to pay the rent up front for the full term (6 mos) at a discount, and my stepson paid us back in monthly installments. Of course, that would burst your pinch-a-penny facade.
 

Tia

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Are all the roommates going to sign something, so if they decide to bail their still responsible for covering their portion?
 

Patri

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For us, all parents signed the lease (though some girls made the payments), but if anyone defaulted, the others were not responsible for her share.
The rent was always paid.
 

klpca

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Turns out I'm not the only parent who balked. We're calling the property manager directly. I think I will give them limited info over the phone.

I also told my daughter to see what other properties the property manager had listed so that they didn't have to pay for multiple credit reports. (I'm making her pay for each application herself). That ought to limit the number.

Thanks for the advice. It was very helpful.
 

LLW

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Are all the roommates going to sign something, so if they decide to bail their still responsible for covering their portion?

Turns out I'm not the only parent who balked. We're calling the property manager directly. I think I will give them limited info over the phone.

I also told my daughter to see what other properties the property manager had listed so that they didn't have to pay for multiple credit reports. (I'm making her pay for each application herself). That ought to limit the number.

Thanks for the advice. It was very helpful.



Typically, everybody on the lease is individually responsible for the entire lease, not just for their own portion.

I am not sure a property management company would accept the "over the phone" method. And they will insist that the parents sign the lease contract.

A parent signing as a co-applicant will be responsible for the roommates' portion of the rents and damages, and any damage/liability that the roommates' friends did to the apartment. I would not sign on as a co-renter.

The prepaid rent method would be a feasible solution. Talk to your daughter about how much rent she wants you to subsidize and make that a lump sum prepayment to the landlord. Negotiate with the landlord for a discount. Then the landlord could evaluate the 3 young ladies' ability to pay the remaining rent monthly. The other parents could do the same. Tell your daughter you are doing this for the discount - which you partly would be.

This way the landlord won't have to get your credit, income and mortgage info.

Depending on the rental market, you should be able to get some landlords to accept this arrangement, and limit your risk to the prepaid rent. Damages would be covered by the security deposit, and you wouldn't be involved because you would not be signing a lease contract. It would be wise to have a lawyer look at the agreement you sign with the landlord.
 

AKE

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No matter how trustworthy the roomates or even your daughter is, things can and DO happen. Do you want to be responsible for a party that got out of control (not due to anything that your daughter or roomates did but rather just too many people showing up by word of mouth advertising and too much alcohol) and you ended up paying the bill? As your daughter or roomates dont have monetary assets, the whole bill would fall on your shoulders... same thing if one or more of the roomates defaults for whatever reason (e.g. decides to transfer schools, cannot pay the bill because they loose their part-time job, gets ill etc etc). You could try and recover your share from the roomates but the court costs would way exceed what you would get back if you won.
I never cosigned anything for my children (who are now all adults) and will never do so in the future, regardless of what happens. This may be tough and mean but in the long run it will be better for everyone. My husband and I managed on our own and so did my kids. It was tough at times but also a good lesson in affordability.
I would also never give all the financial data that is being requested by the landlord. You would be giving away too much personal information too many times and that opens the doors wide to fraud (e.g. The information is written down on a piece of paper which the potential landlord keeps in a drawer or throws into the garbage). If you do decide to go this route a better solution is to have the landlord call you. For a credit check all they need is your SSN - NEVER give out banking information.
 
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Mosca

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I just did this, not but a couple days ago. The girls settled on the apartment first, THEN I filled out the inquiry form.

I agree that you should fill out as few applications as possible, but not because of the inquiries; because you don't know how secure the documents will be at the other end. Although they are supposed to be kept secured, lots of places leave applications lying out on tables and desks, or throw them in the dumpster when they're not needed rather than saving them for 5 years and then shredding them, as required by law. Dumpsters and desks are a prime source of information to petty identity thieves.
 
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Ken555

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Fwiw, my first apartment after the dorms was great...until my roommate decided to spend the next two quarters studying overseas, which was just a few months after moving in. I don't recall exactly how we solved it, but we did so amicably. Legally I believe we were both responsible for the initial year, and that's how it should be. The rental market must have been different back then since I know neither of our parents signed anything.
 

Patri

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Typically, everybody on the lease is individually responsible for the entire lease, not just for their own portion.

Our contract is clearly the opposite for rent. Damage, however, would be difficult to prove, so all would probably be liable.
 

presley

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I had to co-sign for the first 2 apartments for my daughter. Both had to be done in person. I wouldn't have ever passed my paperwork with my SS# in any other way. This last apartment decided that they (my daughter and her BF) had established enough credit that they would overlook the proof of income and didn't require a co-signer.
 

bogey21

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I guess I got lucky. When my Daughter and two of her friends rented a house in Abilene, Texas at the beginning of their Junior year at Abilene Christian University nobody signed anything, not even the girls. It was kind of like one of the old time Texas oil deals. They just shook hands with the owner, nothing more. The girls just moved in, paid the rent, and all went just fine.

George
 

klpca

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Times were definitely easier. I never had to get anyone to co-sign either.

We're not going to have much of a choice in this - our daughter works but it's not enough to pay the rent, she has no credit history (no credit cards and no rental history since she's always lived on campus), seniors can't live in the dorms, and there's a shortage of housing near the university. We started out trying to buy a place near her school because landlords are making pretty good money, but we weren't going to be able to close the deal in time. (Competition is fierce to buy the income units - no surprise).

I am going to try to do some negotiating with the landlords on the wording of the contract. And they are just going to have to get by with a credit report only. I'm glad that others have confirmed my thinking that they were asking for way too much information. Thanks.
 

MuranoJo

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Watching Judge Judy would probably cause many to think twice about co-signing for something like this. Seems to be a recurrent theme on those 'judge' shows. :D
 

northwoodsgal

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Several years ago our son rented an apartment with a friend in downtown Madison, WI. My husband and I had to co-sign the rental agreement, but we were only obligated for our son's portion of the rent. The rent wasn't any less than being in the dorms, but they had a kitchen and separate bedrooms (though just big enough to fit a twin bed in).
 

klpca

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Several years ago our son rented an apartment with a friend in downtown Madison, WI. My husband and I had to co-sign the rental agreement, but we were only obligated for our son's portion of the rent. .

This gives me hope because this is what I want to do.

So far I have heard nothing else from my daughter. I assume they were not chosen to rent the unit. She told me that in the end there were over 10 applications for the unit.
 
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