My response is this: For the last couple of years I have encouraged landlords to consider offering all-new, fully approved residents the following option for Move-In Funds Requirements:
Option A - (Traditional) 1 month's rent plus 1 month deposit or
Option B - 5% higher for monthly rent plus 50% off deposit.
So for example, if you would normally charge $500 in rent, the following would be the two move-in payment options you would offer:
Option A - Rent $500, Deposit $500
Option B - Rent $525, Deposit $250
For those with higher rental amounts, simply use the formula I gave above to figure what your options would be.
This plan is very easy to convey to new residents. And it's suggested that the options actually be incorporated and presented in the lease. That way, anyone doing the new resident orientation for your properties will not be able to neglect offering the options.
And as you can imagine, sometimes new residents actually ask us before the orientation begins if we can work with them on the deposit. Our response is, "We actually offer you two options right here in the lease. Choose the option which works best for you."
There's one other note to readers. Even with just 5% added on to whatever your rent, as long as your renter stays at least a year, the additional rent received over the year added to the the smaller deposit will still be more than the traditional deposit that most landlords require. I mention that for landlords who are concerned that the smaller deposit received will be less money to cover themselves in case of damages after a year.
Those who have attended
my bootcamps know that with the management systems I implement it's very rare (if at all) that I have someone move before staying with me at least a year. Likewise, it's rare that damage builds up to any significant amount during that first year that the resident doesn't cover while residing in the property.
To see the complete discussion on this topic click now, which includes input offered by several landlords on how much deposit they now require. Some landlords and managers no longer request any deposit. And as always, be sure to check landlord-tenant laws for your state before implementing new ideas. One book I recommend for all landlords to have as a resource is called
Landlord's Legal Kit for Dummies, which is
only $29.95.
Click to read more or to order online.
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