So tomorrow i'm going to meet up with the landlord to sign a lease on an apartment.He is asking me to pay for the application fee and he is also asking for first months rent. This is my first time renting/leasing so i don't know if i'm new at this but wouldn't i give the first months rent after i get approved and not before?I just feel nervous just handing a random guy money. I have no criminal background,excellent credit and a good job so i don't think ill have a problem with the application. But what if they deny me?The landlord says if they deny me he will return the money but like i said why doesn't he just wait till they approve me then give him first months rent? Also is there a legal document anyone has that will state if i give him first months rent and get denied i will get my money back.
Are you meeting him to sign the lease or are you meeting him to fill out the application? If you're signing the lease then yes it's normal to give him the money cause you'd already be approved.
If you're meeting him to do the application then yes some landlords require you to submit a deposit equal to one months rent to know that you are serious cause if you back out after you are approved they likely have it written that they get to keep it.
Just make sure you get something in writing, don't pay with cash and maybe do a little background search on the landlord or PM.
I'm meeting the landlord to him give the money for the background check and for first months rent.
The process is typically, application and application fee, then approval, then sign lease, then finally the money changes hands. Note: Credit laws require the application be signed so don't confuse signing the application with signing the lease.
Some landlords do collect a "deposit" upfront. Usually a check and then if you are approved, they deposit it in the bank as the security deposit. If not, it gets shredded. It's kind of old school IMO. The idea is that it locks the tenant into the apartment so they don't continue to shop. Doesn't really work, but it is a novel idea. Personally I wouldn't give a check for anything but the application fee without approval.
Some tenants offer the security deposit when they apply to "secure" the place and let the landlord know they are serious. In market where rentals are in high demand, they hope it will make them "rise to the top of the pile."
Sometimes shifty tenants offer money upfront so the landlord gets blinded by dollar signs and doesn't screen them carefully or at all.
It's probably a low risk to give the deposit with the application, especially if the transaction happens in person. If it's all via email from Craig's List, I would no way provide money upfront.
You should not give the landlord rent until you are approved. When I take application I require the tenant to pay a $30 application fee that is nonrefundable and a $100 towards the security deposit which is refundable if I reject the applicant. If I approve the applicant then the $100 becomes nonrefundable.
If there is a deposit required make sure you sign something indicating whether it is refundable or not. Normally if you are not approved they have to return it. If you change your mind they may not have to return it. Be sure you are clear on how long until the credit check is done and whether the deposit is refundable. Normally now I take deposit when the lease is signed.
Join the Largest Real Estate Investing Community
Basic membership is free, forever.