Move-in fee v. security deposit

General Landlording & Rental Properties
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Move-in fee v. security deposit

Joey NakayamaPro Member
Investor · Chicago, IL · Member since 2013 · 129 posts · 68 votes

As a Chicago landlord, I've noticed many local apartment listings that ask for a non-refundable move-in fee instead of a security deposit. I suspect this is partially due to Chicago's strict laws regarding security deposits.

Fellow landlords, where do you fall on this issue (especially you Chicagoans)?

And for any renters out there who have weighed these options, what do you think?

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Marcia Maynard
Investor · Vancouver, WA · Member since 2013 · 3k+ posts · 4k+ votes
12y

What you can do is dependent on the landlord-tenant laws for the jurisdiction of the property. What works is dependent on the specifics of the market.

We charge: application fee/move-in fee/security deposit/first month's rent. For a typical 2BR/1BA duplex unit that would be $40/$150/$600/$660-$690. For a typical 3BR/1BA house it would be $40/$200/$800/$1000. We specialize in "affordable" housing, which means on the low end of the rent scale, clean & well maintained, but a bit dated, in B or C neighborhoods that have a reputation of being safe and desirable.

If a prospective tenant questions the move-in fee (rarely does this happen) I explain it is to cover the costs that we incur when moving in a new tenant, such as changing the locks and administrative processing.

We prepare a folio to give the tenant that is a welcome packet of useful information and also contains the rental contract. On move-in day we surprise the new tenant with a move-in gift package of our favorite cleaning products in a cleaning bucket, a new cutting board, toilet paper, liquid hand soap, paper towels, disinfectant cleaning wipes, dish washing liquid or dishwasher detergent. We provide the tenant with use of drop cloth floor runners and furniture sliders for one week to make it easier for them and to protect our property from unnecessary damage. We also have a bucket of "approved hanging devices", a small hammer and a picture measuring and leveling device that we loan them for one month.

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  • Steven Muresan
    Chicago, IL · Member since 2017 · 6 posts · 2 votes
    9y
    Originally posted by @Steven Muresan:

    Great thoughts here BP, @B

    When I bought my 6 units building, it was fully rented, with 5 Yearly leases and 1 M2M lease. We returned all the deposits. Now I`m kinda risky cause they renting without a deposit. When I'll do the extension of the leases, which will be M2M is it that the right time to ask for the move in fee? Any ideas ?

    @Joey Nakayama 

    Thank you for the  good idea ! 

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  • Art M.
    Chicago, IL · Member since 2015 · 414 posts · 94 votes
    9y

    I’m renting the bottom of my house hacked duplex (2B/1B) in McKinley Park for $1,450 and deciding what I should charge for the move-in fee as well as pet fees. I’m sort of just going based on how much I like the tenant and how much of a hassle the type of pet they have would be currently. I just rented out a condo in River West (3B/2B) for $3,300 and the move-in fee was $1,000 and $300 for a medium dog. Wanted to bump this thread to get some more recent input.

    Also, question: I’m holding a $1,500 security deposit for the current tenant and I’m sending it back soon. Do I need to pay interest as an owner-occupant? I remember reading in the broker study material that I don’t.

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  • Sean GrahamBusiness Member
    Investor , CPA · Detroit, MI · Member since 2016 · 582 posts · 248 votes
    9y

    @Art M. Hi Art, I am curious about your duplex in McKinley Park. I am interested in house hacking in that neighborhood, but I do not know too much about it. It sounds like you are getting very good rent at $1,450 for a 2B/1B. Would you say that is high for the neighborhood? What areas (blocks/crossroads) would you recommend looking at within McKinley Park? Is there a lot of crime?

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  • Matthew Olszak
    Real Estate Broker · Chicago, IL · Member since 2015 · 1k+ posts · 2k+ votes
    9y

    @Art M. If you have an owner-occupied building under 7 units, you are exempt from the CRLTO, so no need to worry about the security deposit provisions.

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  • Art M.
    Chicago, IL · Member since 2015 · 414 posts · 94 votes
    9y

    @Sean Graham Hey Sean, I'm on 38th by Damen & Pershing a couple blocks from the actual McKinley Park, which I go to a lot. I do have one of the nicer units in the area, so my rent is on the higher end. My upstairs unit will probably go for $1,600-$1,700 when we move. I love the neighborhood. you can look up the crime stats, but it's safer than a lot of more expensive North Side neighborhoods. I've never felt unsafe here or even witnessed any crime. It's a working class demographic, but I see more and more yuppies every day and ride past them on my way to work in the Loop every morning when I didn't ride past any 9 months ago. As someone who would rather be living in the mountains, a forest, or on a farm, I like it here; it's like a mini suburb. No nightlife across the street to draw drunk, loud people. Kids running around during the day, but it gets quiet enough to sleep with the windows open at night. Bought the place for $270K off the market from a rehabber. Lot of new construction - both commercial and residential - in the area

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