Finally...found good tenant but...

11 Replies

Have had a 4 month vacancy, tenant wants to rent as of oct. 1st 

and asks for a rent discount if she pays 6 months in advance. 

has anyone ever done this? If so, how much of a discount and why?

is there an upside to this that i dont see? thanks!

@Marci Stein  

What did you use for an application and screening process for this tenant?  How are her income (3 - 3.5 x rent) and other debt obligations?

Typically when a tenant offers to pay several months rent in advance, it is a red flag ... at least to us.  Most folks who are financially sound and aware would rather keep their money and have it work for them (even if in an interest account or T-bill) than prepay rent for six months.

The other thing is: are you allowed to accept it?  Here (NB, Canada) we are not permitted to request, nor accept, payment in advance of the next rental period.

We will sometimes discount rent slightly for a longer term lease {we even do that less and less these days}, but never for pre-payment.

Marc-  I usually offer a small discount with a tenant who has already rented from me a while.  My discount is only about 3% because I'm not as desperate for cash now as I was starting out.    I do not allow new tenants to pre-pay that much time.  The downside -it can be extremely difficult to get rid of someone who has pre-paid.  Conducting illegal activity? Tough.  Snuck in their uncle,cousin, bf, gf, baby daddy and 5 pets?  Tough.  Breaking house rules?  Partying and disrupting?  You get the idea.    I would only allow 2 months - first and last.

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@Marc Stein  I have tenants who have prepaid rent and one problem I have is not setting the money aside if I don't think about it so I can draw every month for payments.  If I have money sitting around I usually try to buy or fix something.  I have not run into a problem with it, but most of mine are folks who are seasonal and want to be paid up during the lean time.  Offering at the beginning of a lease is new to me.  If you tell them no discount and they still want to prepay be very careful.  It is legal to collect advance payments here but maybe they have a problem you have not discovered yet like being a registered sex offender or something and want to lock up a long term before it is discovered.

very interesting thoughts --sounds like it's not a good idea to prepay. 

thanks!

Originally posted by @Marc Stein:

very interesting thoughts --sounds like it's not a good idea to prepay. 

thanks!

 Marc,

If the candidate checks out in every other way, ask them why they wish to prepay.  If it is simply to get a discount, its not worth it to either of you.  If it akin to @Jerry W. example, and the tenant is pre-planning for lean times, then the money could be deposited in trust account and rent payments transferred to you every month.

yes it is for lean times and i will take your idea to her -thanks Roy!

Landlords should be happy a tenant wants to pay six months in advance because most tenants cannot pay two months that is if the tenant check out ok.


Joe Gore

I have been in business for my self for many years, and I go by the policy that I'd someone is offering you money you should take it.  Just make sure to include that the rent is non refundable in the lease, due to early move out, lease breaking, illegal activities etc.  Some people like to pay months ahead as they feel security in knowing that they don't have to deal with payments for a while, they might have gotten a lump sum of money, and they might want to try to lighten their future bill burden up by paying bills way in advance, maybe they think think a ex spouse will be coming after them in court, and they want a paid place to live, etc

@Joe Gore 

@Marci Stein  

I think I hear bells and fireworks going off as for once I actually agree with Joe !!!

Mark, most tenants these days are living paycheck to paycheck and you have a tenant willing to pay 6 months or rent in advance while you have had a 4 month vacancy.  If everything else about her checks out, negotiate a reasonable discount and exhale for the next six months that your rent is already here !  As I are not familiar with New York law,  do a quick search and make sure there are no issues with prepaid rent.  Then, enjoy a vacation from have to check the mailbox on the first....or later for a while