Tenant Paying Deposit in Increments?

Question

Asking for parents and curious myself. They have a vacant rental SFH after a lengthy and expensive eviction. They finally, after 2 months now, found a seemingly fine candidate. However, the woman is asking if she can pay the deposit in increments, instead of in full up front? They told her no, needs to be up front... but I am wondering what others think about this? I would say absolutely not, I have never heard of such a thing, do others allow this?

Chris Szepessy · Answer

I agree, don't allow that. If for some reason you need to evict before they pay their security deposit, you have a lot less money to help cover your costs of eviction and repairs.

Ryan Murdock · Answer

I wouldn't do it. First month and deposit upfront or no go. On a unit where I require first, last and security (usually SFH's) I will sometimes allow payments on that "last month" (something like and extra $200/mo until it's paid) but nobody moves in without at least a full month's rent and equal amount of security deposit.

Anthony Wick · Answer

I have allowed this one time, and it did work out. The situation: family relocating from a different state, new job (but same industry), wife was stay at home mom. They paid first months rent and half the deposit, then paid rest of deposit over next 3 months. He had arrived the week before, was living in a hotel, and wanted to get into a place asap before wife and child arrived. All checks worked out very well (good credit score, not much in revolving debt, etc), but I did take a risk in doing it. And yes, people "should" be able to afford this up front. Then again, if everybody could, we'd  have a lot of empty rentals as they'd be buying their own place.

Robert Biggerstaff · Answer

Oh heck noooooooooooo

Michael Noto · Answer

Account Closed This is an easy one. Be lucky they are letting you know upfront they cannot afford the apartment. After going through an expensive eviction like you mentioned, your parents have obviously learned their lesson and are being patient with the tenant they choose this go around and I agree with their course of action.

Kenneth Garrett · Answer

Account Closed

The only thing I have allowed is if I require two months of security deposit, I will allow them to pay in increments the 2nd month of security deposit.  Full months rent and one month security deposit.  I have only done this twice and have never had a problem.

R. Elle Berry · Answer

That's an indication of how the rental payments will be during the term of her lease! Red flag. When I lease properties I have detailed conversations with the potential tenant and I listen for red flags as so. RUN.

Katie Stewart · Answer

I would definitely not allow them to pay in increments. As the others have said, they are just showing they can't afford the rent. I would move on to the next applicant...

Jennifer T. · Answer

I did this twice, back in my more "newbie" days, and it was a big mistake both times.  The first time, I was only going to be out the security deposit for a "couple weeks", until they got the previous one back from their previous landlord.  I got half of it about 2 weeks later.  Then another $100 one month after that.  And then the s**t hit the fan and they couldn't even pay their full rent on Month 3.  Same with Month 4.  They did a midnight move-out, without giving me any notice, the day after Month 5's rent was due.  And, of course, since they knew they wouldn't get any of their partial security deposit back, they left the unit filthy and stole some items out of it.  I was out a lot of money with them.

The second time I did it is actually someone who is still a tenant.  They had about half the security deposit with the 1st month's rent on move-in.  And then it was the same deja vu story.  They would have the rest when they got it from their previous LL.  That was almost two years ago and they are still $385 short on the SD.  ((Shocker)) they aren't on firm financial footing and are always angling to try and pay late/partial payments.  For the most part, we don't allow it anymore because we are already too much at risk with only a partial SD.  But it's a bit exhausting and irritating to deal with on a regular basis.  While I realize the "smart" thing to do would be to give them a 30-Day Notice.  I fully admit, I still don't as long as they keep paying the rent.  Hassle and insecurity about it, though it is.  It's a so-so rental market, demand-wise, and I'd probably end up with at least a month of vacancy.

At any rate, hindsight being 20/20, I wish I'd waited for tenants with a full security deposit.  This is now a firm policy.

Tenant Paying Deposit in Increments?

Most Popular Reply