The Guarantor Guide for NYC Renters: What are They and Do I Need One? (2024 Updated)

Syd Shields,Co-Founder & CTO

The interior of a New York City apartment.

What is a Guarantor?

A guarantor is an individual or entity that agrees to take on financial responsibility to pay for your rent in the event that you are unable to pay for it.

Essentially, a guarantor acts as a co-signer on your lease, assuring the landlord that the rent will be paid even if your personal finances fall short.

In NYC, where the cost of living is high, landlords often require a guarantor if your income doesn’t meet the standard requirement — typically 40x the monthly rent.

Do I Need a Guarantor?

You might need a guarantor if you don’t meet certain financial criteria set by landlords.

This includes:

  • Your income is less than 40x the monthly rent. Most NYC landlords require that tenants earn at least 40x (often 80x) the monthly rent, annually.

  • You don't have American credit. If you’re new to the U.S. or have only recently started building credit, landlords may be hesitant to approve your application.

  • Your credit score is not excellent. Even if you have a credit history, a low or average credit score can make landlords wary about your ability to sustain a lease.

  • You do not have proof of employment. If you’re between jobs or starting a new position you might not be able to provide a current proof of employment.

  • You are self-employed. Freelancers and self-employed individuals often face scrutiny due to fluctuating income. A guarantor with steady income can provide the security landlords are looking for.

  • You are a student. Without a full-time income, students typically don’t meet income requirements.

  • You are new to the workforce. If you’ve just started your career you likely haven’t yet established a solid income or credit history.

  • You don't have rental history. First-time renters without a rental history may be seen as a higher risk bet for landlords.

How Do Guarantor Applications Work?

Process

Applying with a guarantor involves a process similar to a standard rental application, with the added step of the guarantor submitting their own financial and personal information. The landlord will assess the guarantor’s ability to cover the rent in the event that you cannot.

Documents Required

Both you and your guarantor will need to provide various documents, such as:

  • Proof of Income: Recent pay stubs, tax returns, or a letter of employment.

  • Bank Statements: Showing sufficient savings or assets.

  • Credit Report: To verify creditworthiness.

  • Identification: A government-issued ID, such as a driver's license or passport.

Common Concerns & Risks

Privacy

When applying with a guarantor, both you and your guarantor will need to share personal and financial information. This might raise privacy concerns, especially if the guarantor is a friend or distant relative.

Liability

A guarantor takes on significant financial risk. If you default on your rent, they are legally obligated to pay it, which could strain personal relationships.

Credit

If the rent isn’t paid and the landlord takes legal action, both your credit and your guarantor’s credit could be negatively impacted, affecting your ability to secure future loans or leases.

What if I Don’t Have a Guarantor?

Guarantor Services

If you don’t have a personal guarantor, a guarantor service might be a good option for you. These companies act as your guarantor for a fee, making them an appealing option for those without a qualified individual to act on their behalf.

Who Should Use a Guarantor Service?

  • International Renters: Your guarantor must be domestic. Those moving to NYC from abroad often lack a U.S.-based guarantor with the required income or credit history.

  • Low-Income Renters: If your income falls short of the landlord’s requirements, these services can step in to help secure the lease.

Subleasing

Another alternative to having a guarantor is subleasing, where you take over someone else’s lease temporarily. This is a very common practice in NYC and there are plenty of resources available to find and pay for subleases.

Pros

  • Flexible Requirements: Subleases often come with fewer financial requirements (like a lack of credit checks or 40x income requirements), making them easier to obtain.

  • Flexibility: Subleasing allows you to test out an apartment or neighborhood without a long-term commitment that typically comes with a year lease.

Cons

  • Limited Rights: As a subtenant, you may have fewer rights and protections under the lease than you would as a tenant.

  • Potential for Conflict: You could face challenges if the original tenant fails to meet their obligations. For example, not paying rent or maintaining the property.

Conclusion

Finding a place to live in NYC can be challenging, but understanding the role of a guarantor can make the process smoother. Whether you use a personal guarantor, a guarantor service, or explore alternatives like subleasing, it’s important to weigh the pros and cons carefully. With the right approach, you can find a living situation that works for you, even in the competitive NYC rental market.