Top 3 ways to safeguard rental income with non-traditional residents

As the rental landscape evolves, landlords are encountering an increasing number of non-traditional residents, such as freelancers, recent graduates, and international students. According to Statista, the U.S. workforce is expected to include 86.5 million freelancers by 2027, accounting for 50.9% of all workers. This shift presents a significant opportunity for landlords to expand their tenant pool, but it also brings challenges in mitigating the risks of rental income loss from rent defaults.

With the right tools and strategies, landlords can confidently embrace this new renter demographic while safeguarding their rental income and profits. Here are the top three ways to protect your rental income and minimize risk when renting to non-traditional residents.

1. Utilize Rent Coverage from TheGuarantors

For many landlords, traditional screening criteria such as credit scores and steady income sources are vital for assessing risk. But with today’s growing diversity in renter profiles, including unique work arrangements, not every qualified tenant will meet these standards. That’s where TheGuarantors’ Rent Coverage product comes into play.

TheGuarantors provides coverage that acts as a safety net for landlords by protecting against losses from defaults, damages, vacancies, and lease breaks—all without increasing a landlord’s operating expenses. This service is particularly beneficial when renting to freelancers, gig workers, international students, recent graduates, or non-U.S. citizens, who might not have an established credit score and/or consistent income flow.

For example, consider an international student studying abroad in the U.S. with minimal income and no credit history. With TheGuarantors’ Rent Coverage, landlords can feel secure, knowing that missed rent payments will be covered. Instead of spending your valuable time chasing down guarantors, TheGuarantors serves as a cosigner, saving you time and minimizing your losses.

This solution can be particularly advantageous in markets where student housing is in high demand or properties near universities, where landlords might see high turnover and fluctuating income risk. The benefit of this coverage extends to residents far beyond the student demographic; for example, for a freelancer who may not yet have a regular, full-time income, this product serves as a buffer against potential income instability.

Rent Coverage from TheGuarantors can also serve as a bridge for non-U.S. citizens who may have a high-paying job but lack the credit history or social security number typically required for leasing. By stepping in as a guarantor, TheGuarantors makes it possible for landlords to qualify these residents without added risk.

2. Implement comprehensive resident screening

Tenant screening is a foundational step in the rental process that provides landlords with valuable insights into a tenant’s reliability. But not all tenant screenings are created equally. When evaluating non-traditional renters, it’s essential to use a comprehensive screening service that can provide a fuller picture of a tenant’s ability to pay, even if they don’t have a traditional credit or income history.

For example, landlords can call a current employer or previous landlord to get real-time information, even if the applicant has no social security number or credit history. This approach can reveal signs of responsibility and financial stability that might not appear in a traditional credit check.

In addition, landlords can order a criminal history report from AAOA using only the applicant’s name and date of birth or contact AAOA for an international tenant screening quote.

Landlords can also review bank statements or tax returns, helping to paint a more accurate picture of the applicant’s suitability as a tenant. Combining tenant screening tools with added, incremental risk mitigation methods like TheGuarantors’ products enables landlords to make better-informed decisions when renting to non-traditional renters.

3. Offer deposit alternatives with TheGuarantors’ Deposit Coverage

Security deposits are a tried-and-true way to safeguard rental income against damage and defaults. However, for some renters, especially those with limited liquidity, a traditional deposit can be a significant barrier.

TheGuarantors’ Deposit Coverage product provides a flexible solution that benefits both landlords and residents, offering residents a lower-cost deposit alternative while offering landlords robust financial protection.

Instead of requiring renters to pay a full deposit upfront, TheGuarantors’ Deposit Coverage allows residents to pay a smaller, one-time fee. This product is especially helpful for residents who might lack the cash reserves for a hefty security deposit, allowing them to keep more of their cash and lower move-in costs. For landlords, it provides the same financial coverage as a traditional deposit, including protection against property damage and unpaid rent, while also helping to attract a broader pool of renters.

For example, freelancers with irregular income or retirees with sufficient savings but no steady income can move in without paying a hefty deposit, reducing vacancy times for landlords. For landlords, it’s a win-win: they retain the financial protection they need while offering renters a convenient, more affordable entry to housing.

Closing thoughts

As the rental landscape changes, more non-traditional renters, including freelancers, recent graduates, and international students, are entering the market. Landlords who can adapt their leasing strategies to attract and retain these renters are well-positioned to benefit from a broader, more diverse tenant pool.

Using tools like TheGuarantors’ Rent and Deposit Coverage products provides financial assurance when renting to high-potential but non-traditional residents. Coupled with AAOA’s comprehensive tenant screening services, these solutions allow landlords to approach each applicant with a nuanced understanding of their reliability and ability to meet financial obligations.

Incorporating these strategies not only helps protect rental income but also enables landlords to tap into new, promising markets with confidence. By focusing on innovative solutions like these, landlords can maintain a healthy occupancy rate, mitigate financial risks, and ultimately drive long-term profitability in a competitive rental market.