Tenant Short on Cash To Move In

[Gary Robert Burnham Jr.]

In the 12 years being a property manager of my own properties I have meet some great tenants.  I have also turned away some potentially great tenants because they simply did not have enough cash to move into my units despite 750 credit scores and ended up taking vacancy for a month.  I started asking myself why I was turning away these people simply because they didnt have enough cash to move in at the time.  So instead of turning these people away I simply work with them.  Lets say my 2 bed rents for $1500 here in West Hartford, CT.  I need a total of $18000 in the 12 months they are renting.  What I did was make the rent light in the beginning first 3 months, added more in the next 3 months......etc......This way it helped my 750 credit score tenant get the security deposit back from the previous apartment and get comfortable in the unit with my property.  Is it somewhat risky, yes....but I'll take a 750 and great person all day and bet on them then taking vacancy.  Any other ideas let me know but I found an escalating lease to work great when a great tenant is light no cash to move in.  

[Joe Splitrock]

Quote from @Gary Robert Burnham Jr.:

In the 12 years being a property manager of my own properties I have meet some great tenants.  I have also turned away some potentially great tenants because they simply did not have enough cash to move into my units despite 750 credit scores and ended up taking vacancy for a month.  I started asking myself why I was turning away these people simply because they didnt have enough cash to move in at the time.  So instead of turning these people away I simply work with them.  Lets say my 2 bed rents for $1500 here in West Hartford, CT.  I need a total of $18000 in the 12 months they are renting.  What I did was make the rent light in the beginning first 3 months, added more in the next 3 months......etc......This way it helped my 750 credit score tenant get the security deposit back from the previous apartment and get comfortable in the unit with my property.  Is it somewhat risky, yes....but I'll take a 750 and great person all day and bet on them then taking vacancy.  Any other ideas let me know but I found an escalating lease to work great when a great tenant is light no cash to move in.  

 Requiring rent and deposit upfront is part of my screening process. If someone can't come up with the equivalent of two months rent, they will struggle to cover rent. If people want it bad enough, they will get credit card cash advance, borrow from relatives, etc. I have broken up security deposit in the past and it has worked out, but I probably just got lucky. 

Another option today is security deposit insurance through companies like Rhino (sayrhino.com). The tenant pays them a small monthly fee and Rhino insures them for damage. If there is damage, the landlord places a claim and Rhino pays the landlord. Many property managers offer this option. It is especially useful in states that have strict rules around security deposits. It avoid the hassle of return deadlines and interest bearing accounts, etc.

I agree that breaking up a deposit is low risk if the tenant has good credit, but I am also surprised someone with 750 credit wouldn't have the cash.