Holding fee questions

8 Replies

For those of you that accept a holding fee, what is the maximum length of time that you will hold a property for rent? 

That is a great question. Looking forward to hearing some answers.

I hold a non-refundable $100 fee for my short term rental. So many variables - I'll be surprised if there is a rule of thumb.

Holding Deposit of $100 cash for any week or portion of a week, up to a maximum of two weeks. If the prospective tenant defaults, we keep the Holding Deposit. If the prospective tenant fulfills their obligation and moves in as planned, the Holding Deposit will be refunded/converted towards the Administrative Move-In Fee, which is $100-$200 and due at time of move-in.

in my area most renters must give a 30 day notice to present landlord and cannot afford rent for both places at the same time. If the applicant passes all credit and background checks, etc and I choose to offer them my rental, I am "considering " accepting a holding fee of approx $500 (I'll prorate per day) for no longer than 2 weeks. My rent is $1250/month and security deposit is $800 . After signing lease and paying all money due at signing, then the holding fee will go towards the first months rent. If they decide not to sign lease then I  will retain a daily prorated portion to compensate for money lost plus may $50 for inconvenience.

If I do this, I will definitely have them sign a Receit and Holding Deposit Agreement.

@Marcia: $100 holding fee doesn't seem like enough to cover your cost of losing 2 weeks (1/2 months rent) if they bail out.

But maybe my idea of $500 is too much. I'm thinking $100 for one week and $250 for two weeks, which would be the longest that I feel comfortable holding the property. Thoughts and suggestions...

I do a binder agreement to hold a property. My thought on cost is 2x the rent. So if they want to hold a $1,000/month unit for 2 weeks, I would charge them a $1,000 binder "consideration" to hold (in a signed agreement). If they sign the lease by the end of the 2 weeks, it transfers first to security deposit, then to animal deposit (if applicable) and then to rent. If they do not sign the lease, they find somewhere else to live and I relist the property. The money remains mine. This ensures that only the serious will sign... otherwise, I pass on them and move to a tenant who is ready and able. It takes too much time to list, screen, show, screen, etc. to mess around.

I don't see the upside for the landlord to accept a holding fee. 

If the tenant wants it, why not have the tenant sign a lease?

@Josh L. for me, signing the lease, collecting the first months rent plus the full deposit in cash and handing over the keys all happens at the same time.  Once we have a lease, its theirs.

I'll hold for a maximum of a week to 10 days.  I require a hold deposit equal to the security deposit.  Its non refundable.  If they sign the lease as agreed, it become their deposit.  If not, I keep the hold deposit and go onto the next person who wants a unit.

If someone applies and is approved, but wants a longer hold than that, I given them the right of first refusal if I find someone else who is willing to move in sooner.

Originally posted by @Josh L. :

I don't see the upside for the landlord to accept a holding fee. 

If the tenant wants it, why not have the tenant sign a lease?

In situations where  the applicant is accepted but must give their current landlord notice. If the applicant looks very good you might not want to lose them. Also they cannot afford to pay the rent at their current place in addition to the new rental at the same time (while they give notice).

I would never sign a lease without receiving ALL money and handing over keys to tenant. Otherwise you can set yourself up for a world of headache!

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