General Landlording & Rental Properties

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Mac Boeve
  • New to Real Estate
  • Holland, MI
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Deposit to Hold vs Signing a Lease Early

Mac Boeve
  • New to Real Estate
  • Holland, MI
Posted Aug 14 2022, 20:16

I have a rental unit available currently with an excellent tenant that wants to move in at the beginning of next month (2-1/2 weeks from now). I'm trying to figure out whether I should have her sign the lease early or go with a deposit to hold. 

She is willing to sign the lease early and pay first months rent plus security deposit in order to hold the unit. Is there any downside doing this instead of a 'deposit to hold'?

Grand Rapids, Michigan

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Sergey A. Petrov
  • Real Estate Consultant
  • Seattle, WA
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Sergey A. Petrov
  • Real Estate Consultant
  • Seattle, WA
Replied Aug 14 2022, 20:26

What does a deposit to hold accomplish better than a signed lease with a security deposit and first month rent paid? This is a no brainer.

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John Underwood#1 Short-Term & Vacation Rental Discussions Contributor
  • Investor
  • Greer, SC
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John Underwood#1 Short-Term & Vacation Rental Discussions Contributor
  • Investor
  • Greer, SC
Replied Aug 14 2022, 21:20

Get the signed lease and move in money while you can. This better protects you.

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Nathan G.
  • Real Estate Broker
  • Cody, WY
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Nathan G.
  • Real Estate Broker
  • Cody, WY
ModeratorReplied Aug 16 2022, 05:54
Quote from @Mac Boeve:

@Sergey A. Petrov a holding deposit is easier to make non-refundable since some states regulate what you can do with a security deposit.

I require applicant to pay a Holding Deposit and sign a Holding Agreement. It says they agree to sign the lease, set up utilities, pay the rent, and take possession no later than [DATE]. If they fail, they forfeit the Holding Deposit and the rental goes back on the market. If they abide, the Holding Deposit is applied to the security deposit on move-in.

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Chris Seveney
  • Investor
  • Northern Virginia
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Chris Seveney
  • Investor
  • Northern Virginia
Replied Aug 16 2022, 08:59
Quote from @Mac Boeve:

I have a rental unit available currently with an excellent tenant that wants to move in at the beginning of next month (2-1/2 weeks from now). I'm trying to figure out whether I should have her sign the lease early or go with a deposit to hold. 

She is willing to sign the lease early and pay first months rent plus security deposit in order to hold the unit. Is there any downside doing this instead of a 'deposit to hold'?


 Sign the lease and have it note the move in date for when they move in. They can give deposit and pay first month when they sign lease. One less thing to worry about