What are "Move in Funds"

Question

From reading Brandon Turner's Book on Managing Rental Properties, on his Deposit to Hold Agreement sheet, he writes, "Other Move in Funds must be paid in amount of: $__".

What are other move in funds?

Roy N. · Answer

Here we are permitted to request a security deposit no greater in value than one month's rent and rent no further in advance than the next rental period.   We require the security deposit be paid upon signing of the lease and will hold a unit for a period of no more than 1-month in advance of the lease start (on an annual lease).   If the tenant were to "break" the lease before moving in, they would forfeit the security deposit.

So ... why is this mismanagement?

Roy N. · Answer

"You just gave control to the prospective tenant"  I think that's as clear as it can be said.

Every time you sign a lease you give control to the tenant ... that's how this business works.  The key to ensure you are remunerated the the period in which the tenant has control of the premises, which is precisely what we do by taking the deposit upfront (and often the first month's rent) and not allowing move-in to be more than 1-rental period away.

Roy N. · Answer

Hey J ... it's not lack of trying on either side, we just seem to be missing one another's perspective ... no harm, no foul ... I'm alway looking for an opportunity to see things from another perspective.

Richard Fields · Answer

I won't hold for more then 2 weeks and for no less then half a months rent (non refundable)

Jeff B. · Answer

We all make choices; I choose NOT to take a deposit-hold.  They sign and move in or else.  I also don't follow-up when they say the will get back to me with more information.  If they will not follow up on items clearly in their interest, the also will not do so when it is in my interest.  I just love my latest tentant - - she hounded me to death - - what's next, what do you need, when can I sign.  SURE sign of a good prospect.

Jeff B. · Answer

NEVER!  They come to see and either accept & pay up or walk away.  That can mean I've driven a long way for nothing, but that's fine by me!

Max T. · Answer

First, last, and security deposit (and pet fee if applicable) for me

Jeff B. · Answer

IMO, deposits to hold is mismanagement!  WHY?  You just gave control to the prospective tenant and if they so elect, when they back out, you lost time for a few penny's.

Corollary to this is the tenant that can't pay rent + security in one check and asks, "can I make partial payments to catch up?"

Roy N. · Answer

NA Beard

There is no vacancy issue - we have these units re-rented months before the current tenancy is over.  The vacancy above was designed in by us to provide an opportunity to affect some renovations.  If the two groups of tenants in question decided to bail on their move-in dates of June 01 or August 01, we keep the deposit which pays for a month while we find new tenants (usually from our waiting list).

As I said before, whenever you sign a lease, you put control in the hands of the tenant - it's the law in every jurisdiction where we've operated.

Roy N. · Answer

So ... as suspected ... the act of taking a deposit or fee to hold a unit for a tenant is a matter of personal choice and style and not the Persephone  portrayed above.   There are likely several external factors - such as the strength of the prospect; the tightness of the local rental market - at play as well.

You choose not to hold units, which is perfectly fine.

We take the amount of the security deposit (one-month's rent) at the time the lease is signed, and will hold a unit for up to one month.  When the tenant moves in, the amount becomes their security deposit; if they back out, we keep it.  We have three student units coming out of lease this year : one each at the end of April, May and August.  All three have been relet with move-in dates of June 01, August 01, and September 01 - we have taken the amount of one month's rent as security deposit in each instance. It the tenants were to back out, we have sufficient time to find suitable replacements (we have a waiting list).  The gap (1-month, 2-months) on the first two properties will permit the opportunity to affect renovations and upgrades.    Other than planned renovations, we've not had a vacancy in those units in almost 4-years (local vacancy rate for such properties is ~6%).

What are "Move in Funds"

Most Popular Reply