Tenant wants to pay the first 2 or 3 months up front

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Tenant wants to pay the first 2 or 3 months up front

Aaron Arnold
Rental Property Investor · St Joseph, MO · Member since 2018 · 38 posts · 20 votes

I have a potential tenant who I’ve throughly screened and everything looks good. His credit score, background and income are all verified and qualify him for the unit. He wants to pay the first 2 or 3 months up front. I think his work is somewhat seasonal so he has some money available and basically just wants to avoid blowing it. Should I be concerned?

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Aaron K.
Specialist · Riverside, CA · Member since 2015 · 6k+ posts · 3k+ votes
7y

Yes, this is generally a concerning sign, if your tenant is not confident in his ability to have rent in the future that is a red flag.  Also many unqualified tenants will do this to increase chances of getting the unit and borrow to do so, it is a big red flag, but if you have done the background check it may be okay if he just doesn't know these things.

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  • Aaron K.
    Specialist · Riverside, CA · Member since 2015 · 6k+ posts · 3k+ votes
    7y

    Yes, this is generally a concerning sign, if your tenant is not confident in his ability to have rent in the future that is a red flag.  Also many unqualified tenants will do this to increase chances of getting the unit and borrow to do so, it is a big red flag, but if you have done the background check it may be okay if he just doesn't know these things.

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  • Richard Weinberg
    Rental Property Investor · Winston Salem, NC · Member since 2018 · 102 posts · 66 votes
    7y

    @Aaron K.

    I screen my tenant prospects extremely thoroughly including credit evection job application and background check etc. and that allows me to entertain tenant prospects with marginal credit or past credit issues. Not so long ago I had a tenant that offered six months advance and double security deposit to get into the home and they have been on time excellent payment record tenants since.

    One caveat to share, my CPA made me book the six months advance payment in the time. Received so anticipate that if you except a larger down payment. Also make sure you’re in compliance with any state laws on how much you can except from tenants in any particular window. Good luck

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  • Lynnette E.
    Rental Property Investor · TN · Member since 2018 · 2k+ posts · 2k+ votes
    7y

    I'd check with the current landlord to see if there are behavior /rule following issues.  Early rent can make it hard to evict based on behavior issues, e.g. 5 dogs, 3 extra kids on weekends, loud music and way too much medical mj.

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  • Theresa HarrisPro Member
    Member since 2019 · 15k+ posts · 11k+ votes
    7y

    If you think he's fine and the only reason he wants to do this is because he'll blow it, can you take last month's rent where you are?  That would give you a buffer and then he wouldn't have it to spend.

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  • Nathan GesnerBusiness Member
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    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    7y

    I wouldn't say it's necessarily a bad thing but it's something to watch. Instead of taking three months rent up front, take two months rent and then take a two-month deposit. If his income dries up, you still have 30 days to get rid of him and another month for cleaning/repairs.

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