Investor · Tampa, FL · Member since 2014 · 7 posts · 3 votes
Hi,
My husband and I are trying to rent out our first property and we came across a potential tenant who would like to pay deposit over the first two months - first half along with first months rent prior to moving in and second half with the second months rent. They are claiming that the place they live in now did not require a deposit, and they still need to pay rent there for this month and this is the reason they don't have enough money for the full deposit upfront.
Is this an immediate red flag or should we consider this tenant if their credit and income looks good?
Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
12y
Agreed, @Steve Babiak Telling someone to accept a tenant who doesn't have the full move in amount is, IMHO, bad advice. This is a lesson I learned from the school of hard knocks, with a tuition price of about $1500.
I'll emphasize the point about a full month's rent, too. If someone moves on the 15th, and lease is 1st to end of the month, I still insist on a full months rent at move in. Then, on the first of the next month I would want only half a months rent.
Real Estate Investor · Audubon, PA · Member since 2009 · 13k+ posts · 8k+ votes
12y
Originally posted by @Account Closed:
Thank you Steve for feedback, mylease refer to my post, there was no advisement.
I never said anything about advertisements. I used the words "advise" and "advice" - that's what a post turns out to be for people looking for help here on the forums.
I'll emphasize the point about a full month's rent, too. If someone moves on the 15th, and lease is 1st to end of the month, I still insist on a full months rent at move in. Then, on the first of the next month I would want only half a months rent.
Real Estate Investor · Desoto, TX · Member since 2013 · 560 posts · 528 votes
12y
I look at this way, lets say you meet a guy or girl and they tell you upfront they do not plan, they are a bad manager of money, love to shop, and consistently ask you for money. You decide to marry that person. Don't get mad if that person does not plan, they are a bad manager of money, love to shop, and consistently ask you for money. When people tell you who they are, it is often wise to believe them. There are occasions where things work out. Just depends on your risk tolerance.
Muscle Shoals, AL · Member since 2013 · 16 posts · 3 votes
12y
We have done that with one of out first renters. She is still 200 behind on her security deposit but makes her monthly rent payments. Is a good woman. And causes us no trouble. Would I do it again? It's about a 30% chance I would. Not totally opposed but if the circumstance warrants it and I feel it is a good move I'm in.
Investor · San Francisco, CA · Member since 2015 · 2 posts · 0 votes
11y
Hi. My reply is late but it might help other landlords out there.
Although we did that to a couple of our long term tenants - they had a bad credit but we felt the sincerity and humility from them and we're glad we did. So if you are 100% all about business, it's either a yes or no. With these renters, one stayed 5 years, one is currently on lease, 1 year and counting, and they pay on time so there are people that I believe can use some of our help.
There was this one incident that we did not allow security deposits in installments. Why not this time? Because they did not provide good faith - they did not turn in their applications in spite of expressing interest in the property so red flag #1: all talk and that's about it. So my advice is to be alert regardless of how much they tried building themselves in front of you. Stay focus on your requirements: full deposit amount, background check, completed application, references etc. Because they will try to earn your trust then all of a sudden, you forgot about your requirements. There was that one moment when I wondered "If they really are doing good in their business (they claimed to be insurance brokers), why are they renting?". Anyway, when they could not fulfill 100% of the deposit, I said no and moved on. Then, he claimed that he was just "suggesting" so red flag #2: lying. And that's when his true colors came out - I let him talk and talk some more bs it's laughable but I completely ignored him. That ticked him off to the point that I had to report him to the police department. So in order to stay strong in the business (or in general), people will talk but it's not important. At the end of the day, you are the landlord, you have the house, you have the privilege. Sometimes you try your best but I do not take them personally. Now, we found a renter - she has a big heart, she gave us good faith security deposit, there was no hustling involved. Happy tenant, happy landlords :)) And I'm happy that our tenants love the pool that we just renovated :)
We also have an instance where I'm very glad I was flexible with a family on the security deposit. They said they have half now and could pay the rest in 2 weeks. So I drafted up an agreement that I would accept their 50% payment and in 2 weeks (specific date), the other 50% was due. In 2 week waiting period, they understood I would still show the property and if I ended up renting to someone else, I'd refund their deposit downpayment.
They just renewed for another year with me. They always pay on time. They are truly a fantastic family that I admire. I'm very glad that I worked with them.
We also have an instance where I'm very glad I was flexible with a family on the security deposit. They said they have half now and could pay the rest in 2 weeks. So I drafted up an agreement that I would accept their 50% payment and in 2 weeks (specific date), the other 50% was due. In 2 week waiting period, they understood I would still show the property and if I ended up renting to someone else, I'd refund their deposit downpayment.
They just renewed for another year with me. They always pay on time. They are truly a fantastic family that I admire. I'm very glad that I worked with them.
But in this case you got the deposit in a month, correct? Breaking the deposit into paychecks matches a lot of people's real world situation. I think it where the tenant screening process is a little different than accept/reject. The good prospect gets it split up, the weaker one can check back in 2 weeks when they have the full deposit.
Rental Property Investor · Baltimore County Maryland and Tampa Florida · Member since 2013 · 2k+ posts · 2k+ votes
11y
Yes, they paid the remainder of the deposit by the agreed date. Then we signed the lease. Besides not having the deposit all upfront, they were very strong candidates. :-)
Real Estate Broker · Deland, FL · Member since 2014 · 83 posts · 24 votes
11y
Wait for the right qualified tenant. I made that mistake 6 years ago, letting the tenant pay the deposit in 3 monthly payments which became a 6 months ordeal to get it paid. I didn't renew the lease.