I've found a couple to rent my condo and they want to sign a lease on Sunday for a move date of April 1st.
I'm thinking that I'd like to collect the deposit on the day that the lease is signed, which is on next Sunday, then collect the first months rent before the renters can start moving in. Does this sound correct?
Involved In Real Estate · Hyattsville , MD · Member since 2011 · 298 posts · 256 votes
15y
I would sign the lease and collect both security and first months rent- At this point if they aren't serious you need to know so you have time to find someone else. The problem also comes in that they could move in prior to the 1st and you will be out a few days rent but a bird in the hand is better than 2 in the bush( Haven't you seen the geico commerical) :lol:
Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
15y
Yes! I would take the rent in advance if they have it. What if they don'tshow up, did you take the unit off the market? Isn't this the 9th? You're going to hold it for them? Be sure to write in your addendum that rents are prepaid and applied to the first month at the 1st. Make sure the delayed possession is clear. Good luck
Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
15y
Since its only the 9th, I'd be hesitant to commit the property. On the 19th, probably. But it seems a little early unless your market is slow.
Assuming you want to move ahead, what I do is take a non-refundable hold deposit equal to the amount of the deposit. Then, when we get together to sign the lease, I turn that into their security deposit and collect the first month's rent. Always get a full month up front, not prorated. Prorate the second month's rent, if need be. If they don't show up and sign the lease as agreed, you keep the hold deposit and try to find someone else.
When I do the lease and they pay, they get the keys. Sunday is only the 13th, but if you're going to sign the lease, give them the keys.
Involved In Real Estate · Hyattsville , MD · Member since 2011 · 298 posts · 256 votes
15y
I would sign the lease and collect both security and first months rent- At this point if they aren't serious you need to know so you have time to find someone else. The problem also comes in that they could move in prior to the 1st and you will be out a few days rent but a bird in the hand is better than 2 in the bush( Haven't you seen the geico commerical) :lol:
Real Estate Investor · Pickerington, OH · Member since 2009 · 38 posts · 11 votes
15y
We collect the nonrefundable holding deposit that will convert to the security deposit once the lease is signed and the full first month's rent is paid. I have a tenant moving in the 20th of March and here is the holding deposit receipt they signed:
This will acknowledge receipt of the sum of $950.00 by BRARON PROPERTIES LLC ("Owner") from XXXXXX ("Applicant") as a holding deposit to hold vacant the rental property at XXXXXX, until MARCH 20, 2011.
The property will be rented to Applicant on a ONE YEAR LEASE basis at a rent of $995.00 per month, if Applicant signs Owner's written One Year Lease and pays Owner the first month's rent ($995.00) on or before MARCH 20, 2011, in which event the holding deposit will be applied to the Security Deposit.
Owner and Applicant agree that if Applicant fails to sign the Lease Agreement and pay the first month’s rent ($995.00) on or before MARCH 20, 2011, Owner will retain this holding deposit to compensate Owner for the inconvenience.
A PRORATED AMOUNT OF $385.20 FOR MARCH 20-31, 2011 WILL BE DUE APRIL 1, 2011 AND STAND AS APRIL’S RENT.
Investor · Aurora, CO · Member since 2009 · 200 posts · 74 votes
15y
We do the same as Rick. We collect a hold deposit that will be converted to the security deposit. Came in handy this month. Had a tenant back out after two days. He lost the hold deposit and we had another renter 2 days after that.
Real Estate Investor · Baltimore, MD · Member since 2008 · 1k+ posts · 268 votes
15y
I found tenants in the beginning of March, collected both 1st month and Security Deposit right away, signed a lease effective April 1st. Will give them the keys on April 1st.
Commercial Real Estate Broker · Memphis, TN · Member since 2010 · 151 posts · 82 votes
15y
Have a form that states that they are putting down a non-refundable deposit on the property. You cant use the word NON refundable enough. You are doing this in consideration of taking the unit off the market. If they want to pre-pay rent, fantastic, just make sure both sides have documentation of this.
Also, under no circumstance should the funds be in anything other than cash, cashiers check, or money order. I CANT STRESS THIS ENOUGH. Some are skeptical about cash, but always make sure funds are secured. NEVER accept a personal check starting off.
Investor · Middletown, NJ · Member since 2008 · 2k+ posts · 1k+ votes
15y
Originally posted by George P.:
I found tenants in the beginning of March, collected both 1st month and Security Deposit right away, signed a lease effective April 1st. Will give them the keys on April 1st.
That's exactly how I do it, and if they back out, deposit is non refundable.