Do you allow split payments for security deposit?

Question

Hello all,

I am currently trying to fill a rental vacancy.  Someone contacted me and asked whether the security deposit can be paid over the course of the first 3 months.  If so, they can move in two weeks.  If I don't allow the deposit flexibility, they would have to wait until a month later to move in.

Does it sound like a red flag to you?  This is the first time I get a request like this.  Your comments are greatly appreciated.

Jon Holdman · Answer

In my experience its absolutely a red flag.  Good luck ever getting the rest of the deposit.  I've done it and regretted it.

I generally won't hold a unit for two weeks, let alone a month.  If I did decide to hold a unit two two weeks I would want a non-refundable deposit equal to the security deposit.  And then a full months rent (regardless of move-in day) when the lease was signed.

Jose Rubio · Answer

Not recommended ..we have done this several times in the past and 75% of the time we have had issues.  Not only have we NOT collected the full amount of the pending deposit, but we are out rent + eviction cost....and more than likely higher cost for getting it in rentable condition again.  Don't fall fort the sob stories, wait for the better tenant .

Pete T. · Answer

I agree w/ @Jon K. I would rather wait for a better candidate that could potentially rent the unit long term.

Roy N. · Answer

The only time we allow the security deposit to be paid in instalments is when we rent-out a unit 3-6 months in advance.   In those instances, we allow the tenants (almost always students securing a place for the next academic year) to pay the deposit via instalments between the time they sign the lease and when they take possession.

The rule "no security deposit & first months rent => no keys" still holds.

Jonathan Cubeta · Answer

don't do it, the one time I decided to try and help out a tenant by doing that a exact thing.  I got burned and stiffed out of security and multiple months rent.

SAY NO

Andy Collins · Answer

Your taking a short term problem, a vacant unit, and potentially giving yourself a long term problem (a tenant that doesn't have money).

Have you checked their credit and talked to prior landlords?

andy

Ned Carey · Answer

Yes it is a red flag but it depends on your tenant pool.

I have actually done this successfully a few times. I am in Baltimore and there are more bad applicants than good. If someone is otherwise good I may do this. It has worked three out of four times I did this. The fourth time was a tenant already in place when we foreclosed on the property.  - Ned

Jon K. · Answer

No.

What if they move in, trash the place, never pay the rest of the deposit, then stop paying rent? Then you're out rent, deposit, and damages.

If they can't pay a reasonable deposit upfront, they simply don't have the money to move. You'll never see the rest of that deposit more times than not. Since you can't evict over deposits, I would require the deposit upfront and allow rent in payments if anything. But that would still be risky. I wouldn't do that unless they checked out in every other way- fairly good credit, good rental references, not going into bankruptcy, verifiable job.

Huge red flag.

For cities where rent is, say, $2000 a month and deposits are $2000, that might be a little different. Tenants don't often have $4000 laying around if they're relocating. Still, they should find somewhere they could afford instead of asking to put the deposit in payments.

Chris Adams · Answer

I have allowed this a couple of times. I charge 1st month/last month and 1 month Sec Dep for my properties, this can range from $2,400 - $3,300 to move in. Most of my tenants are relocating to my area for work, and $3k can sting a bit when you pile all of the cost of relocating from out of state. So I will allow them to pay me 1st/last to move in, and make 3 payments for the sec dep.

I will only allow this if they have passed all of my tenant screening requirements. I do not make this a habit, but I have allowed it a couple times.

Bill Gulley · Answer

Not good practice to do that. I have been flexible. Say rent is 600, market is slow, you can take 400 and allow them to use the garage (written in the lease) full possession when the deposit is fully paid by a date certain.

I worked with a lot of students, often the parents don't have $1,400 setting around, I have taken  a note from the parents, secured and unsecured. I may have been lucky too, I like to think it's my ability to read people and instill the need to pay as agreed. :)

Do you allow split payments for security deposit?

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