First & Last Months' Rent?
I have read that you should not collect the "last months" rent up front because if the rent is raised during the tenants stay, they will not likely make up the difference before leaving. They will say "I paid you the last month's rent when I moved in," but 3 years later, the rent is $150 higher per month. How do you experienced landlords deal with this problem?
I have never heard of anyone asking for more than what the tenant originally paid for the last month's rent. It's true that rents may have gone up, but on the other hand, the main goal of getting last month's rent is tenant selection. I wouldn't ask them for more myself. Also, you never know how long they are going to be there. What if they were there for 20 years and rents in your local barely increased. You collected interest on their rent money for 20 years.
We have not been able to ask for last months rent here in NC because the market can't bear it.
I can't ask for last month in SoCal either. This would be too much if I was renting. First month and security deposit seems to work well though.[ Edited by 3qu1ty on Date 11/15/2003 ]
My local landlord-tenant laws prohibit collecting first and last month's rent up front. I can, however, collect a security deposit in addition to the first month's rent.
The standard practice in my area is security deposit is equal to one month's rent. When the lease is renewed and rent is increased, I always collect enough extra security deposit to equal one month's rent.
It's been my experience that getting an extra month's rent is not so much dependent on the part of the country you are in as it is the characteristics of an individual property. For example, I have one house that is in a part of town where rents are only average for the area because it is a lower middle income area. However, there is a shortage of decent rental houses in the particular neighborhood my house is in. The demand for this house is unbelievable. Although I can't charge much more for this place because of the income levels in this area, the tenants will borrow money from family or whatever else it takes to get into this property.
Thanks for the replys. That is great advice. I have also heard that one month's rent for security deposit is about norm. What about cleaning? Are carpet and paint considered wear & tear, or does this come out of the security deposit?
Thanks again, Joe
Your question has already been posted and answered.
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