How Do you Determine Security Deposits

[Paul Stout]

I am working through an analysis on a SFR and I am researching realtor.com and Craigslist to make an informed decision on what I can expect to get in rent. As I am getting closer to acquiring my first property and placing a tenant, I have to decide what I want to charge for a security deposit. I also need to decide whether or not I want to get the first month's rent or the first and last month's rent up front.

In my research I have seen spreads on similar properties that are too wide to make an informed decision.  On one property with a $1075 monthly rent and a $1075 security deposit all the way to a $1625 monthly rent with a $5000 security deposit.  Some people ask for first month up front some don't and some ask for first and last. 

Please chime in and let me know how you determine what the security deposit should be and if you charge any rent up front.  I remember reading somewhere that charging the same amount for a security deposit as the monthly rent was a bad idea because it connotes a monthly payment to a tenant. 

From my research it looks like the market rent is between $1400 and $1500 for this particular SFR. I am thinking about charging first month rent up front and a $2000 security deposit. Thoughts?