First, Last, Security? What IS The Best Way?

[John Thedford]

After landlording for five years, I have learned some stuff the hard way. How much is enough security deposit? Do I collect last months rent in advance?
Here are my ideas:
1. I do not collect last months rent. Under FL law, this must be segregated and used when the last month arrives. If the tenant leaves, I may or may not owe this to the tenant.
2. I load up HEAVY on security deposits. I do this for several reasons. If you have to evict, the cost of the eviction can take every dime and then some. In extreme cases, if they destroy your unit, you have more security deposits to make claims again. Last but not least, you cannot charge one dime extra if they have a service animal. Therefore, I make the deposit high which helps cover potential damage by their animal.
If the tenant does not have enough deposit, etc I will NOT accept them. They are behind at move in, and this almost guarantees future problems. Some jurisdictions have laws as to how much deposit may be collected. I suggest collecting as much as reasonably possible under your laws.

I have had the "pleasure" of having to go back and sue for either past due rents or damages. So far, most have worked out well and I was made whole. This is a PITA and takes time, effort, money, and is a drain on the brain. The more a tenant has to lose, the better chance they will be responsible. 

One last note: inspections are important. Know what is going on inside of your properties. This allows you to curb problems before they get into bigger problems.