One of your main priorities as a landlord is finding reliable tenants who will pay rent on time and take care of your property. However, there are times when even the most promising tenants may need a guarantor to secure a tenancy agreement. In this guide, we’ll explore why tenants may need a guarantor and offer tips on how to find reliable guarantors to protect your investment.

What is a Guarantor and Their Role in a Tenancy Agreement?

A guarantor is a third-party individual who agrees to be responsible for the rent payments and any damages caused by the tenant. In other words, if the tenant cannot pay the rent or damages the property, the guarantor will step in and cover the costs. This provides landlords with an added layer of security and assurance that they will be able to collect rent and recover any losses.

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The Importance of Having a Reliable Guarantor for Landlords

Having a reliable guarantor is crucial for landlords as it reduces the risk of financial loss caused by non-payment of rent or damages. A guarantor should be someone who is financially stable and able to cover the rent payments and damages if the tenant is unable to do so. In this way, landlords can rest assured that they will be able to recover any losses in the event of a default.

Students

Students often need a guarantor as they may have little or no credit history, no steady income, or may not have worked long enough to establish a credit rating. Accepting students with guarantors can be beneficial for landlords as it opens up the rental market to a wider range of potential tenants.

Low-Income Renters

Low-income renters may need a guarantor as they may not earn enough to meet the landlord’s income requirements. Accepting low-income renters with guarantors can be advantageous for landlords as it increases the pool of potential tenants. 

International Renters

International renters may need a guarantor as they may not have a credit rating or proof of income in the UK. Alongside the financial side, landlords must complete other checks including Right to Rent in order to stay compliant within the current legislation.

Self-Employed Renters

Self-employed renters may need a guarantor as they may not have a steady income or a proven track record of financial stability. If they are unable to show tax returns proving an income meeting the financial requirements, then a guarantor could be a great alternative. 

Accepting tenants with guarantors can be beneficial for landlords as it increases the pool of potential tenants and reduces the risk of financial loss caused by non-payment of rent or damages. However, it’s important to screen potential tenants and their guarantors thoroughly to ensure that they are financially stable and able to meet the rental obligations in case of a default.

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