Insurance providers are increasingly backing NYC renters who don’t meet landlord requirements

TheGuarantors will insure tenants who earn just 27 times the monthly rent

TRD NEW YORK /
Sep.September 28, 2016 11:30 AM

In New York City’s sky-high rental market — with median rents nearing $3,400 in Manhattan and $2,900 in Brooklyn — convincing a landlord to lease out an apartment isn’t always easy.

Most landlords only accept tenants with an annual income of at least 40 times the monthly rent and who have credit scores greater than 700. Now renters who can’t meet those stiff requirements, and who don’t have their own guarantors, are turning to financial services to insure them for rent payments.

TheGurantors, launched two years ago by a Columbia University TRData LogoTINY grad, sells payment insurance to tenants and guarantees payment to the landlord if the tenant becomes delinquent or defaults. The advantage to a landlord in high price markets like New York City is that it lowers their exposure to vacancy, the Wall Street Journal reported. The startup joins companies like Insurent, which is currently the biggest operator in the market and claims it’s in over 3,000 buildings.

“It basically opens it to another category of tenant,” Jonathan Miller, president of appraisal firm Miller Samuel and TheGuarantor’s advisory board member, told the Journal.

Douglas Elliman’s Cliff Finn told the Journal that between 10 and 30 percent of tenants in buildings he leases are now insured through TheGuarantors.

The company, partnering with $5 billion insurance firm Hanover Insurance Group, is willing to take greater risks than landlords. TheGurantors will offer insure tenants who earn just 27 times the monthly rent and have credit scores as low as 630. It will take into account savings and other liquid assets, as well as income earned overseas.

“We’re taking a little more risk than the landlord, but we’re charging a premium for that,” Julien Bonneville, founder and chief executive of TheGuarantors, told the paper.

Buildings like Peter Cooper Village, Stuyvesant Town and Gotham West complex near the Hudson Yards accept TheGuarantors, according to the newspaper.

The Real Deal last month reported on landlords offering concessions to renters in Manhattan as supply continues to outpace demand for ultra-luxury apartments. [WSJ]Miriam Hall


Related Articles

arrow_forward_ios
Tenants and landlords are preparing for what to do when tenants do not pay rent this month. (Credit: iStock)

“They don’t deserve rent”: Tenants weigh rent strikes as landlords plan for the worst

Gov. Andrew Cuomo (Cuomo by John Lamparski/NurPhoto via Getty Images; Illustration by The Real Deal)

“It’s scary:” Landlords praying tenants pay April rent

(Credit: iStock)

“Kicking the can down the road”: Real estate industry says $2T relief plan doesn’t do enough

Bernie Sanders (Credit: Getty Images)

Bernie Sanders throws support behind New York rent-suspension bill

Massive stimulus package has limited upside for real estate

Massive stimulus package has limited upside for real estate

Michael Gianaris (NY Senate, iStock)

Gianaris proposes relief bill for renters and landlords, but not banks

Gov. Andrew Cuomo (Credit: Bennett Raglin/Getty Images)

Cuomo says NY “took care of rent issue,” but has no policy in place

Mayor Bill de Blasio (Photo by William Farrington-Pool/Getty Images)

De Blasio says he will pursue rent moratorium

arrow_forward_ios
Loading...