Hi everyone! I'm wondering what security deposit everyone is requiring in Metro Detroit. Currently I am at the state max of 1.5 rent in Plymouth, but I am considering lowering it to increase my tenant pool.
What has everyone else found?
We use a round dollar number just under 1.5 rent.
Plymouth is a pretty wealthy area, your applicants should be able to put down 1.5X rent as a security deposit. If not, are they going to be able to meet your credit score and income requirements?
I have seen many owners that will do 1X rent or just a fixed $500 security deposit. Just be aware that the lower this number goes, the more you open yourself up to troubled tenants, and the less recourse you have against those tenants. Best of luck!
I’m in Plymouth, but my rental is a condo that goes for $900 a month. I’m noticing that the replies to my ad are less this year, and wondering if there has been a rent softening in my tenant pool. Rather than lower the rent, I’m wondering if lowering the security deposit would attract a better class of tenant who just ignores 1.5x security deposit listings because other places they look at only require 1x rent.
1.5 times the rent if it is a condo in detroit 900 is a little high unless you are in a certain area the rental pool is slowing down as always this time of year you will start to have less qualified renters and less people keeping their showing appointments we have about 300 properties in Detroit and a condo would go for 700 to 850 depending on bedroom count most candidates are section 8 so if you are priced too high for the bedroom count your missing out on about 60%. SECTION 8 only gives a set amount for rent and utilities based on bedrooms.
Of course if you are not in actual Detroit and your are just speaking about the metro area then disregard 100% of what I just said lol
I always had this idea that single family homes are 1.5x rent and apartments/condos are 1x rent. Really large apartment complexes/big companies set up lower deposits for really good credit. This is all from my rental experience.
Now that my gf and I actually own a duplex we are going to house hack and put up for rent in Oak Park, MI, we are not so sure. So in the same boat. We want a good quality tenant to take care of the place. What other qualifications are you doing? We are thinking:
-3x rent gross (combined or single income)
-640 credit score
-No evictions or criminal history
-Will verify income with paystubs/calling job
-Previous landlord references
We will use rentprep.com since they say they verify everything that is reasonable.
The only purpose in lowering it is to lower the quality of tenant applicant. If you want to draw from the shallow end of the tenant pool go ahead otherwise it is a mistake to lower your standards and risk the cost of evictions.
I’m in Plymouth, in Metro Detroit, not Detroit proper. I appreciate the reply though!
I like the idea of doing a lower deposit for good credit. Then the question is just what to set that level at!
I’ve been doing must make 3x times rent, and I pay attention to items on the credit report to make sure they have cash flow to afford it. Credit score of 620, although I’ve noticed people are either below or decently above this. I verify income and references (as much as you can, I don’t always have luck talking to previous landlords.). Pay stubs and W-2s are a must.
I’ve noticed previously that the people most willing to pay a higher rent are those people who are less qualified, and will pay more money to have you overlook that. (Even offer it unprompted.)
Which makes me wonder if better qualified candidates would be attracted to a lower security deposit simply because they have more options. Those with the most money being least likely to be willing to spend it perhaps
Another option is to move instead to a lower deposit with better credit score.
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