The Future of Security Deposits

[Brandon Sowers]

As rents continue to rise, this in turn increases the cost for tenants to move in to a rental property. It is not uncommon for us to list properties for $1500 per month. This can end up costing a new tenant over $3k to move into one of our properties if the "standard" 1 months rent security deposits applies. Our firm has a very thorough screening process for tenants that we place. However, qualifying for a particular property is one thing but having $3k+ to move in is another. I am certain there are  plenty good tenants we are missing out on that simply don't have that kind of cash on hand.

I am wondering if there are any BP owners or property managers that are trying anything different from requiring traditional security deposits? ( ie. full month, 1/2 month ) Maybe you are using Obligo or another service/product that allows the tenant to pay a low nonrefundable monthly fee to insure their unit against damages. Or, has anyone come up with their own system to help lower the financial barriers to moving tenants in. 

*I would like to keep this discussion limited to security deposits funds and not get into the weeds of how we qualify tenants or what is considered a "chargeback" to tenants. 

[Greg M.]

If a potential tenant doesn't have at least one month of rent saved that they can use for a security deposit, then I don't want them as a tenant. 

Do you really want a tenant that is living paycheck to paycheck?