Security deposits, 1st month, last month?

Question

Do you charge first month, last month, plus 1 month rent as security deposit? Or do you just charge first month rent and one month rent as security deposit? Pros and cons?

Thank you

Thomas S. · Answer

It depends entirely on what your state code dictates. In absence of code regulations you will need to be consistant with your market in regards to what you collect.

Crystal H. · Answer

I get 1st, last and 1 month of security deposit. Always. No exceptions.

Alexander Felice · Answer

I just do 1 month rent and security deposit equal to monthly rent.

No problems yet, although based on the average of these topics it seems I'm on the lower end of the spectrum.

Jassem A. · Answer

@Jon S.

I try to get first, last and full month security because if they decide not to pay after the 1st month then you can still recover some or most of your losses since the eviction can take two months or longer.

John Thedford · Answer

I charge 1st month and load up on the security deposit. Generally, I get 1.5 times the monthly rent as the deposit. So far, no complaints even though the deposits now average almost 2K. I am primarily investing in the Cape Coral market. Make sure and get familiar with chapter 83 which is Florida Landlord Tenant law. You MUST keep the security deposits as specified by state law.

Jon S. · Answer

Thank you all @Jassem A. @Matthew Kreitzer  @Russell Brazil

Good input. The lease is taking place in Tampa Florida. I still have to check what is prevailing with equivalent apartments in the area. These are higher end units, so I am wondering if getting first, last and deposit is more prevalent when rent is higher. In lesser units, the prevailing in this area is one month rent and one month deposit, although some are beginning to charge first, last and security.

Russell Brazil · Answer

State law always prevails of course, but also look to what is customary in your market place. Here in the DC area first month's rent plus one month security deposit is customary. State law in MD and DC allow for 2 months security deposit, but if a landlord were to actually ask for that they would never find a renter as it isn't usually practice in the market. Many northeastern cities like NYC and Boston, it is customary to get first and last month's rent plus a security deposit.

Matthew Kreitzer · Answer

There are some states that place restrictions on the amount of money that can be held in security. For instance, Virginia limits security deposits to be no more than two months of periodic rent.

Jassem A. · Answer

I ask them if they can pay first month, last month and full deposit on the application and use that along with the other information they provide to make a decision.  If there are a lot of applications then the applicant that can pay the most up front and also has the better income and rental history will get a higher priority.

Security deposits, 1st month, last month?

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