Los Angeles, CA · Member since 2013 · 555 posts · 261 votes
Most rentals in my area only charge security deposit equal to one month rent. They don't collect last month rent up front either.
Renters in my area have taken this for granted, and some are boggled by why I charge 1.5x rent.
1x rent is never enough. Once back rent is deducted, you have nothing left for damages.
If you're one of those who collects only one month security, what's stopping you from collecting more?
Investor · Singapore · Member since 2013 · 1k+ posts · 3k+ votes
13y
Depends on what neighborhoods your home is in and what are the typical tenants. In a working class neighborhood it would be difficult for many people to have 2 months rent to put down on a deposit. Realistically if you have a $50K house and charge 800/month in rent, 2 months rent is 3.2%. For 3.5% down they could get a FHA loan and buy the place and pay less than half in mortgage! There is a reason they are renters in the first place!
Investor · Boston, MA · Member since 2013 · 27 posts · 0 votes
13y
Its pretty standard to charge first/last/security in boston and I haven't come across tenants that had a problem with doing it. Like OP said it probably is the stigma for a given area.
But yea the boston area is tough, but sky's the limit for rent around here if your wallet is big enough. With some good old leverage in a good area you can get some good returns. The 2% rule definitely doesnt work for these prices but you can for sure find positive cash flow out there.