Sure Deposit: Good? Bad?

Question

Hi folks!

The complex I used to work at had previously used Sure Deposit before moving away from it (for an undisclosed reason).

Has anyone here had experience with Sure Deposit? It sounds like a great program. Instead of a tenant paying a $1200 security deposit at move in, they pay a smaller "bond" which covers me in the event they default or are evicted and covers up to a certain threshold for damages.

I've done some research on google, and some people love it, some people hate it. What could someone hate about it? If a tenant defaults, rather than chase them down, you file a claim and supposedly the insurance company (Assurant) sends you a check for the damages and then pursues the former tenant for collection.

I only own four properties, so from what I read, some people have said you have to own several units in order for it to work for you, while others say it works for them.

Of course, when you talk to Assurant, they sing the praises of the program...why would they say any different?

Recently, I was lucky, very lucky! The tenant skipped, but has a good job and her wages have been garnished ever since. It usually never happens this way. I want to make sure I do everything in my power to reduce property damage/delinquency.

Your feedback would be greatly appreciated. Thanks much.

Erick

Nathan Gesner · Answer

Who makes a better tenant? The one that can afford a $1,200 deposit or the one that can only afford the $300 bond?

The bond is basically like an insurance program.

Tenant wants to rent a house for $1,000. Instead of a $1,000 deposit, you charge them a non-refundable $250 bond which is much more affordable for the tenant and you get to keep the money no matter what. Perfect, right?

The tenant is getting ready to move out. He already knows he's not getting the $250 back. He fails to pay the last month's rent, has a broken window, the whole place smells like cat urine, and he didn't do any cleaning. You suddenly have $2,500 in expenses but you only collected a $250 bond. What do you do? Take him to court or send him to collections but you'll never see a dime of it.

If you have 100 units this can work to your advantage. If 100 tenants pay a $250 bond, that's $25,000 a year. Most tenants leave their homes in good condition so a small percentage of the bond money is applied to cleaning, repairs, or rent and everything left over is pure profit. This only works if you have a large number of units and run a tight ship with decent rentals.

Erick Caffarello · Answer

I’ve heard recently that sure deposit sometimes doesn’t pay the bond. That’s the challenging part when you have a trashed place and the company doesn’t come through. Some on here have said wby rent to people who can’t afford the deposit? To one end, that’s true. But the attraction to sure deposit is you (hopefully) get the money from the bond and can quickly restore the unit to pre-damages condition and get it rented and not have to worry about pursing collection, going to court, but if what I’ve read and have been told about sure deposit is true, if Assurant (I believe) can’t pay the bond, what good is having it?

Mike McCarthy · Answer

I understand that this concept is more inviting in both lower-class areas and cities/states that lean very tenant-friendly. Where it's harder to justify taking money out of security deposits, this bond concept sometimes makes more sense.

Philip Lendroth · Answer

being on the recieving end of this, suredepsoit is great for the owners but bad for tenants. They are purely a debt company that once you sick on people are hard to get off. Though becareful with their polices and state laws. Where I'm from this company is illegal. Any use of what could be considered a "security deposit" is as such. Meaning if they pay 300 bucks out of 1200 then that's 300 bucks is their security despoit and dowsnr act as a bond. I'm in a court process to suit both the apartment complex and suredeposit. To me I wouldnt be involved in their business after me as a tenant will never use such a program again.

My complain originally. I'm a great tenant, I always rent a machine to clean carpets, paint any blemish to original color, heavily clean the house to lessen any burden. The slum lord apartment place I rented from passed the buck of replacing their carpets on their tenants every turn over and include cleaning. My 705 for bons was most definitely used up because of this. When asking for pictures of before/after, receipts of material or just a general walk through neither companys would reply to me just asked for money.

Last time please reveal your state laws on what is tenant and landlord laws

Erick Caffarello · Answer

Thanks for your insight; I appreciate it.

Erick

Sure Deposit: Good? Bad?

Sure Deposit: Good? Bad?

Most Popular Reply

5 Replies