Questions on Collecting Rent in Massachusetts

[Makhwarand Khan]

Hello everybody, I'm looking at real estate investing here in Massachusetts and I have questions for the rent payment and move-in costs. Is it legal to request a Deposit to Hold in Massachusetts? How do you collect the security deposit and the first month's (and last month's) rent? What do you use to collect rent? Is a grace period required in Massachusetts?

[Matt Leonard]

Hey @Makhwarand Khan 

I collect a $100 non refundable deposit (i would refund it if the background check DQ'd them, but haven't had to cross that bridge yet)  at the showing to lock it up.  I use Cozy for background and credit checks, I take the cost off the first months rent if they are approved.  It could be argued that it is an unlawful application fee.  I collect first months rent and security deposit when the lease is signed (ideally ASAP after the showing and background check) and don't require pre-payment of last month's rent.  I am currently using Cozy for rent on 1 unit to try it out.  It works fine, but on another unit I have the tenants pay me electronically though BOA and its instant, instead of waiting the 5 days for the Cozy payment to process.  Make sure you keep each unit's security deposit in a separate interest bearing account and that return of the sec deposit includes any accrued interest.