Collecting Rent
I'm a new REI and I'm renting out my first property. The tenant wants to move in on Sunday May 4. The mortage is due on the first. I'm charging 1 month's rent as a security deposit. Should I also charge the tenant for May's rent (pro-rated) at the same time??? Please help
Thanks
Why not, I would. If you move into an apartment complex they prorate like this.
The security deposit is not rent, it is a refundable deposit held in escrow by you as security for damages beyond normal wear and tear.
If you do not collect May's prorated rent, are you planning to let the tenant have the month of May rent free?
Check your local landlord tenant laws, too. In many areas, security deposits must be held in an escrow account separate from your personal funds. Additionally, the escrow account may also have to be interest bearing, with all interest accrued to the tenant's benefit.
also make sure that you clearly differentiate between the sec deposit and the monthly rent...... the tennant may take the deopsit for the last months rent if they are for the same amount.
ALWAYS get the security deposit AND the prorated rent. This is not a charity you know, it's a business .
My policy is that the first months rent has to be for a full month. I'll prorate the second month's rent. Mr Tenant, it's not my fault, it's company policy.