Helping Your Kid Qualify for an Apartment? Proceed With Caution

If you co-sign or guarantee a lease, make sure you understand the risks.

- ROBYN A. FRIEDMAN

ACROSS the country, rent prices have moderated lately, providing some relief for recent college graduates embarking on their careers and seeking their own place for the first time. The median U.S. asking rent fell 1% in April from a year earlier, to $1,625, the biggest decline since February 2024, according to a report from Redfin. That’s $80 below the record high of $1,705, in August 2022.

Still, apartments in many markets remain difficult to afford, and even financially stable grads who have sufficient income may struggle to qualify. Along with evaluating a prospective tenant’s earnings, landlords often check their credit, references and rental history. A young adult who has a thin credit record, for example, may fail the eligibility test.

Enter the Bank of Mom and Dad. Parents are often accustomed to signing on the dotted line and paying the bills for student housing, since college students typically have little or no income, and they may be eager to help their kids as they start their postgraduate lives, too. But when the children are adults who need help qualifying for an apartment, parental assistance may take a different form: serving as a guarantor or cosigner of the lease.

“It’s important for parents to know that this means they are liable for the lease in the event the child does not pay,” says Chantel Bonneau Stewart, a certified financial planner at Northwestern Mutual in San Diego. That may be particularly concerning for parents who are approaching retirement and don’t want to have the potential liability of paying off their child’s rent, which can run $5,000 or more a month in high-cost cities such as New York or Boston. So before you take on this responsibility, make sure you understand the terms and the risks.

GUARANTOR VERSUS COSIGNER