I'm curious what others are charging as security deposits in C-class areas. California allows for 2 months rent (security deposit) + first month's rent up front.
Are other landlords in these areas asking for what amounts to 3 months up front? If so, do you have trouble finding tenants that can come with this?
the apartment association of Orange County could be pretty accurate answering that.
@Jo-Ann Lapin , great advice. The rental is actually up in Apple Valley, CA so I could reach out to the real estate association up there.
I am also still interested in hearing others' experiences if anyone has any to offer.
We ask for a security deposit equal to one month's rent.
We ask for a deposit that is about 125% of rent and round down a bit from there. I've had a tenant not pay their last month of rent and leave the property in shambles. Some push back on price, but if they do, that means that they aren't the right tenant for us.
Fillmore, CA. Small town, in Ventura County.
All of ours are in Newport Beach.
Hi @Sean Autry , call it tough, but I personally never recommend asking for less than 1.5 months' rent - especially for a lower-class area. However, my area is nearby to that of @Christine Swaidan 's, so the trend may be different in your area.
The general idea is that because CA is so tenant-friendly, and because our property costs are so high, one bad tenant can wipe out months - or even years - of profitability. That is why I will typically always ask for a full 2x the rent value as a deposit, and I'd be doing so more than ever in a lower-class area. As @Kristina Heimstaedt said, if they fight back on it, then they're not the tenant I'm looking for.
Honestly, if somebody can't afford to come up with $4,000-5,000 for a deposit (which ideally is returned to them anyway), I probably don't want them as a tenant. Plus, the more they have at stake, the less likely they are to cause issues. Therefore, there aren't too many convincing reasons for me to ask for less than the full 2x as a deposit.
We deal with a lower income clientele. Our residents for the most part could not come up with a larger security deposit. Most tenants that exit get their full deposits back. Rarely do we run into a situation where I must bill them for damages beyond their deposit. This is probably because we have seniors and it tends to be the last stop for many of them.
This is our first rental, and like you said Nick, the tenants we had to evict (inherited tenants) destroyed it and have wiped out at least a year of profit.
I want to stick to the 2X deposit, but wasn't sure if many have had success with that in lower income areas... like many things, sounds like there's diversity in practice.
Given this latest experience, I think we'll try the 2X and see how it goes. I don't want it to sit vacant forever, but I also don't want to go through this nightmare again...