Experiences with security deposit alternatives: Rhino, LeaseLock, Obligo?
John KennedyPro Member
Rental Property Investor · Indianapolis, IN · Member since 2012 · 17 posts · 21 votesExperiences with security deposit alternatives: Rhino, LeaseLock, Obligo?
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Member since 2026 · 118 posts · 31 votes
2dAsk each provider the same four things before you pick one. Who decides what counts as damage, and what proof do they want from you? How long from a filed claim to payment? What is the cap compared with your real turnover costs? And does the tenant still owe the provider after a claim, since that changes how collections work. Whatever you choose, keep the move-in and move-out photos and the ledger in one folder, because the claim is only as good as that paperwork.
10 Replies
- Member since 2017 · 58 posts · 27 votes3d
I haven't used Rhino, LeaseLock or Obligo, so I can't answer the claims questions. I'll give you the other side from someone who stayed with cash deposits, renting by the room.
A couple of things I'd check before switching:
The claim is only as good as your move-in record. With cash or a bond, the fight is the same: what did the room look like on day one. Dated photos of every wall, floor and fixture, signed off by the tenant at move-in, is what wins it either way. If you don't do that today, fix that first.
Ask each provider what happens when the tenant cancels or stops paying the monthly fee mid-lease. With cash you hold the money. With a bond you hold a promise that can lapse, so your lease should say the tenant owes a cash deposit if their coverage ends.
Run the tenant's math too. A cash deposit comes back if they leave the place clean. A monthly fee never comes back. Some good applicants would rather pay one month up front.
I keep it at one month's rent per person, and every person has their own lease, so a claim is always about one resident and one room.
Hope someone with real claims experience on those three chimes in. That's the part worth hearing.
- Member since 2026 · 118 posts · 31 votes2d
Ask each provider the same four things before you pick one. Who decides what counts as damage, and what proof do they want from you? How long from a filed claim to payment? What is the cap compared with your real turnover costs? And does the tenant still owe the provider after a claim, since that changes how collections work. Whatever you choose, keep the move-in and move-out photos and the ledger in one folder, because the claim is only as good as that paperwork.
- 2dSimon W.Business MemberReal Estate Consultant · Lehigh Valley PA & New York City · Member since 2013 · 1k+ posts · 675 votes
I haven't used these either, but there's a bookkeeping difference worth knowing if you end up running both side by side.
A cash deposit isn't income. It's the tenant's money you're holding, so it sits as a liability on your books until move-out, and it only becomes income when you keep some of it for damage or back rent. A lot of people book deposits as rent and then wonder why their income looks high the year they sign a bunch of new leases.
With a surety or insurance product there's nothing to hold, which is simpler. But if you file a claim, the payout is income when you get it, or it offsets the repair cost if that's what it was for. Also check who pays the fee. If any of it is on you, that's an expense to track.
If you offer both options, keep a clear list of which tenants have a cash deposit and which have coverage. When someone moves out 18 months from now, you don't want to be guessing whether there's money to send back.
- Real Estate Agent · Memphis · Member since 2026 · 583 posts · 345 votes2d
The claims process is what I'd be most interested in hearing about. Offering a deposit alternative sounds convenient for tenants, but how much protection does it actually give the landlord when there's damage or unpaid rent? Especially if the provider disputes part of the claim or takes weeks to pay. That's what I'd want to know before considering it over a traditional deposit.
- Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes2d
We work with another provider and, to date, have not had any issues, but as others mentioned, you definitely need to do a lot of due diligence.
7e investments53 Reviews - Investor · Midwest · Member since 2019 · 348 posts · 229 votes1d
@John Kennedy we use Leap and Obligo.
Claims: When a tenant left owing for damage or unpaid rent, how did the claim go? How long did payment take, and did you recover the full amount you claimed?
C: We just filed our 3rd claim with Leap and each time it's been a smooth process. We videotape all move-out conditions which isn't required to my knowledge. We submit the video and pictures with the lease details and in the 3 cases each was an eviction so we submitted that paperwork as well. Smooth process. We almost had a hiccup with a claim last week because of a timeline issue. With Leap you have 60 days to submit the claim if I'm not mistaken.Coverage limits: Was the coverage enough to cover your real losses, or did you end up short?
C: Yes, in one case they covered until we leased the unit again.Tenant quality: Did offering a no-deposit option change the applicants you got, for better or worse?
C: No because you only get this option once you qualify for our unit. If you don't pass our screening you won't be offered the deposit alternative.Underwriting: Have you seen providers tighten credit or rent minimums lately? I saw the recent thread about Findigs quietly ending Termwise.
C: I haven't seen this shift. Each company underwrites the prospective tenant and recommends you don't sign a lease with them until they give the approval. We let the prospect know although they qualified unless they want to come up with the full deposit, and other move in expense we can't move forward until we have a decision from Leap or Obligo.Legal and lease setup: How did you handle these in your lease and under your state’s deposit laws? Did you have any problems if a provider stopped covering a tenant mid-lease?
C: I haven't experienced coverage being dropped mid-lease. You're not holding the deposit, the agreement is between the provider and the tenant so no impact on how you handle deposits. You're just the beneficiary of an insurance policy for lack of a better description.
Overall: Would you use it again, or did you go back to cash deposits?
C: I keep it as an option because it lowers the barrier of entry for qualified tenants. I think that's the key is it's not a tool to get someone in who otherwise wouldn't qualify. This is to help those who qualify have less out of pocket expense to move in.
Hope this helps. - 1dDrew SygitBusiness MemberProperty Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
First, understand you're not going to get a "get out of jail free" pass with these services.
Meaning, they won't cover S8 tenants or slum-tenants that trash your property.
Some of them did when they first started out, but they quickly tightened their guidelines to avoid going bankrupt due to claims.
What the services are really intended for are lowering the MoveIn Funds for tenants with decent credit.
We tried one out that had a minimum tenant credit score of 640.
It went okay, but we found their processes too slow & complex, so discontinued our relationship with them.
Logical Property Management4.9460 Reviews - Member since 2026 · 31 posts · 9 votes1d
My take is simple: the product only helps if your paperwork is already tight. Where I have seen landlords get hurt is assuming no deposit means less record keeping. It is the opposite. You need the same dated move-in photos, the same signed condition report, and a clear ledger, or any claim turns into a debate. I also would not offer it to a borderline applicant to make the numbers work. If screening is weak, cheaper move-in money just brings the problem sooner. Offer it after approval, not as a way to get to approval, and keep one month cash as the plain default.
I have not used them, so take this as framework rather than a review. The math that matters is coverage limit versus your real turnover cost. Most of these products cap payouts well below a full month of rent plus damages, which is what a traditional deposit gives you. Then look at the claims process: some require you to go through their portal and their timeline, not yours. Also think about the applicant pool. If the tenant pays a monthly fee for the bond instead of putting down a deposit, you may attract applicants who could not raise a deposit, which changes your underwriting whether you like it or not. And check your state law. Some states treat deposit alternatives as their own category with separate rules. For small operators, a plain cash deposit is still the simplest protection.
- 14hJames JonesPro MemberInvestor · Collierville, TN 38017 · Member since 2017 · 772 posts · 569 votes
I have not run Rhino, LeaseLock or Obligo, so I cannot answer your claims questions and I am not going to pretend otherwise. Memphis single family, 454 doors, majority Section 8, cash deposits throughout. Others above have covered documentation and screening well, so I will add the two things I do not think have been said.
First, the one you raised yourself and nobody picked up. Findigs ending Termwise is not a footnote, it is the main event.
What you are actually doing with these products is transferring risk to a counterparty. That counterparty can reprice, tighten underwriting, or leave the market entirely, and when it does you are holding the risk you thought you had moved, on a lease you already signed, with a tenant who never put up cash. The product category is young enough that several providers have already changed shape or exited. Price that in as a real probability rather than an edge case.
Which makes the question I would move to the top of your list the one you put near the bottom: what happens if coverage lapses mid-lease. That cannot be a hope, it has to be a lease term written before anybody moves in. Something to the effect that if the coverage terminates for any reason the resident shall post a cash deposit of X within Y days, and failure to do so is a curable default. Draft it with your attorney, obviously, but go in knowing that is the clause you need. Without it, a provider exiting leaves you with an unsecured tenancy and no remedy.
Second, a reframe on what the deposit was ever doing.
On a single family rental the deposit is usually about one month. A genuinely bad move out, damage plus unpaid rent plus the turn, is routinely several times that. So the deposit was never really loss protection. It never covered the bad ones. What it actually does is two other jobs: it is a screening filter, because assembling that cash proves something, and it is a behavioral stake at move out, because the tenant is trying to get their own money back.
Swapping it for insurance changes both of those jobs at the same time, and most evaluations only look at the first one. The tenant who paid a non refundable premium has nothing of theirs sitting in your account on move out day. Whether that measurably changes how a unit gets handed back, I do not have clean data on, and I would be suspicious of anybody quoting you a number, including the providers. But it is the variable I would actually be thinking about, and it is not on your list.
And the thing that follows from it: if you remove the cash barrier and do not tighten your written criteria to compensate, you have not kept your standards the same. You have changed your applicant profile without deciding to. That is fine if it is a decision. It is expensive if it is a side effect.
One more on claims, since several people touched it. Any third party payer puts an adjuster between you and your money, and an adjuster pays the documented amount, not the amount you lost. So these products quietly reward operators whose move in and move out files are airtight and punish everyone else. If your condition reports are thin today, a claim will underpay, and you will conclude the product is bad when the real problem was the file.
For what it is worth on our side, we stay with cash deposits and put the effort into documentation and fast turns instead, because our losses are driven far more by vacancy days than by damage. Different price point and different tenant base from Indianapolis retail though, so take that as context rather than a recommendation.
Not an attorney, and Indiana deposit law is its own thing. Worth confirming specifically whether your state treats the premium or fee as a deposit under the statute, because that determines your notice and accounting obligations either way.
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