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@Heidi Omans The agent may be telling you that increased security deposits are better because they are. If you collect an additional month rent, that can only be used for rent. However, if you collect additional security deposit, that could be used for any rent that the tenant owes you when they vacate OR damages to your property. I'll give you an example. Suppose the tenant signed a 12 month lease, stayed 12 months, paid for all 12 months, and moved out as agreed with no rent owing. However, when you did your walk-thru, there was $1,500 in damage to the property. In Scenario A, you had collected a $1,000 security deposit and a $1,000 as an extra months rent (call it last months rent or whatever). You could use the $1,000 security deposit towards the damage, but the tenant doesn't owe you any rent so you'd have no legal right to keep that because you labeled it as rent. You'd be short $500 on fixing the damage. You could try to sue the tenant, but good luck collecting - especially in your example if the tenant moved back out of the country. In Scenario B, you had collected a $2,000 security deposit and no extra rent. Same amount of money collected as in Scenario A. However, you'd have more than enough to fix the $1,500 in damage to the unit, and could actually send the tenant a security deposit refund check in the amount of $500. See the difference?

2 Months rent. Security Deposits aren't your money...rents are.

Why can't you just save that extra rent payment for that potential future damage? You don't have to give it back of there's no damage...but you have to give back all of the deposit if there's not damage. The deposits, no matter how many the tenant gives you, isn't your money. IF the tenant gives you $2000 in the beginning of the lease, whether it's on the form of deposit or rent, it's still $2000. The deposits your must keep, the rents you can keep, but in both cases, they can be kept for that future $1500 damage. Is $2000 in rent < $2000 in deposits? If the tenant is late with the rent, they're still late with the rent.

That makes no sense. You can't spend the deposits. You have to keep them available so at the end of the lease, you may have to give it all back. The rent is yours from day one. If you want to keep the rent in an account to cover future damage you can, but you can still spend it. The deposits you can't spend. I say again, your agent makes no sense

Thanks Joe. That's what I thought but the agent is telling me the deposits are better. Appreciate your response.

In a new lease situation, where the tenant has no FICO score because he had lived out of the country, is it better to collect an additional months rent or an deposit?

Which is a better deposit, 2 months rent or 2 months depost?Which is a better deposit, 2 months rent or 2 months depost?

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Which is a better deposit, 2 months rent or 2 months depost?

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