Has anyone ever accepted less than their stated security deposit? Or arranged something other than one up-front payment? Deposit in question is $1,000.
i'd say to use your own discretion. people have all kinds of formulas that say anything less than $1000 is a sure fire way to get a tenant who won't/can't pay. i say go with your gut. if you think they look good on paper, just don't have the $1000, go for it. if they don't look too good on paper and don't have the grand, but you still need to get the place filled, then make your own call.
but i've broken it up over 2 installments as well. good luck!
All my houses are middle class houses, with a deposit of between $750-$975.
My rules are simple, the tenant brings me a cashier's check/Cash for the full amount of the deposit, with the signed contract. I stop having Open Houses after that.
On two occassions I deviated from that and both times I lost out. Once, I accepted a personal check (it bounced) and the other time I said I would take the deposit on the day they moved in (I never saw them again).
If you're desperate for a tenanat, then take less.
Look, the rental market is still incredibly soft and landlords are forced to compete for tenants. If that means lowering rent, giving one month free, allowing pets, dropping the security deposit fee, etc., then you need to do what's necessary to keep your units rented. Because if you don't, there's always a competitor who will.
On the flipside, if you're not in a desperate situation and you can afford to carry the mortgage/taxes/insurance bills, then don't compromise your standards.
In the end, it's all about who has the greater "need."
The message you send to the tenant must be firm. You are in business and must maintain a set of rules. Your reputation could be at risk if you are too flexible. The deposit is the FIRST measurement of tenant cash flow issues. Our suggestion is to hold your ground, and NOT decrease the deposit amount. Your other option is to reduce the deposit amount then increase the monthly rent by the difference plus surcharge. (Monthly rent is $1000. The Deposit is $1000, received from tenant $800 thus $200/12=$17 plus $7.00 monthly fee for prorating and handling.
New 1 year lease monthly rent amount =$1024)
The first months rent and the full security deposit are my companies minimum standards for occupancy. If they can't meet that threshold then, they need to lower their requirements-not mine. I'll wait.
Our personal experience has led us to always demand the full security deposit up front - it is sometimes the only motivation that tenants have to take good care of the property and to clean it before leaving. If we're having a tough time renting the place we will sometimes negotiate on the rent for the first month or two, but never on the deposit.
My caution is this...be careful about "using your gut". In this business it is nearly impossible to keep things totally black and white, but admission requirements should be written down and strictly followed. Tenant screening should be well documented. Frankly, using your gut/impressions can land you in legal hot water. It's easier to defend yourself against a discrimination lawsuit if you're using your well documented admission and screening policy.
[addsig]
I have accepted a security deposit in two installments, but have never compromised for less.
i'd say to use your own discretion. people have all kinds of formulas that say anything less than $1000 is a sure fire way to get a tenant who won't/can't pay. i say go with your gut. if you think they look good on paper, just don't have the $1000, go for it. if they don't look too good on paper and don't have the grand, but you still need to get the place filled, then make your own call.
but i've broken it up over 2 installments as well. good luck!
Hey,
All my houses are middle class houses, with a deposit of between $750-$975.
My rules are simple, the tenant brings me a cashier's check/Cash for the full amount of the deposit, with the signed contract. I stop having Open Houses after that.
On two occassions I deviated from that and both times I lost out. Once, I accepted a personal check (it bounced) and the other time I said I would take the deposit on the day they moved in (I never saw them again).
Get a full deposit, if you do not want headaches.
It depends:
If you're desperate for a tenanat, then take less.
Look, the rental market is still incredibly soft and landlords are forced to compete for tenants. If that means lowering rent, giving one month free, allowing pets, dropping the security deposit fee, etc., then you need to do what's necessary to keep your units rented. Because if you don't, there's always a competitor who will.
On the flipside, if you're not in a desperate situation and you can afford to carry the mortgage/taxes/insurance bills, then don't compromise your standards.
In the end, it's all about who has the greater "need."
The message you send to the tenant must be firm. You are in business and must maintain a set of rules. Your reputation could be at risk if you are too flexible. The deposit is the FIRST measurement of tenant cash flow issues. Our suggestion is to hold your ground, and NOT decrease the deposit amount. Your other option is to reduce the deposit amount then increase the monthly rent by the difference plus surcharge. (Monthly rent is $1000. The Deposit is $1000, received from tenant $800 thus $200/12=$17 plus $7.00 monthly fee for prorating and handling.
New 1 year lease monthly rent amount =$1024)
Eric & Rosa
[addsig]
I have allowed tenants to spread the security deposit on house over 3-4 months with half up front. A lot depends on my gut feeling about the people.
The first months rent and the full security deposit are my companies minimum standards for occupancy. If they can't meet that threshold then, they need to lower their requirements-not mine. I'll wait.
Our personal experience has led us to always demand the full security deposit up front - it is sometimes the only motivation that tenants have to take good care of the property and to clean it before leaving. If we're having a tough time renting the place we will sometimes negotiate on the rent for the first month or two, but never on the deposit.
My caution is this...be careful about "using your gut". In this business it is nearly impossible to keep things totally black and white, but admission requirements should be written down and strictly followed. Tenant screening should be well documented. Frankly, using your gut/impressions can land you in legal hot water. It's easier to defend yourself against a discrimination lawsuit if you're using your well documented admission and screening policy.
[addsig]
Another option is to create a note with interest for the downpayment deficiency amount.
Short term.
You get a few extra $$ for your forebearance.