All Forum Posts by: John Gross

No, I don't charge last month's rent upfront. I charge security deposit first months rent at move in. I outline a lease break fee if the tenants want to move out early instead of charging last months rent upfront.

 I would charge one months rent typically!

Welcome John!

I would collect security deposit. It's easier for renters to understand this is collected to cover the repair of any damages (or balances) they may be responsible for during residency. You can provide the detail in a clause as to what it will be used for; typically the SD is one month, one and a half month, or if they're higher risk tenants, two months', which is rare. As Arkansas doesn't require you to keep the SD in an escrow account, they're essentially serving like purpose.  Either one that you chose to charge, be sure to include what you will utilize the fee for in the lease. 

Feel free to connect & good luck!

Artfully,

Lorien

 You want a security deposit.  If your lease is written correctly the security deposit can be used to cover any tenant caused damage (not normal wear and tear), any unpaid fees (late payments, etc), or any missing rent.  

Let’s say you went with last month rent in lieu of a security deposit.  They stay until end of lease term but they paid last month at move-in and so do not pay any rent at the time of the last month (they have already paid it).  When they move out you find out that someone has used the oven door as a seat and it needs to be replaced at $300.  Someone place hot pot on Formica counter burning it and it cannot be matched.  Cost $1k but due to being 5 years old you charge $500.  There is a significant damage to an exterior door frame where tenants locked themselves out and decided to break in.  $250 to repair.  Were they bad tenants?  Probably not ideal, but not the worse.  Accidents happen.  I have caused damage to my own house for stupid items a few times.  One of my protégés had some items frozen together.  He banged it on granite counter to separate.  The granite counter broke off a big corner.  Not wear and rear, stupidity but not intentionally destructive.  

If you have no security deposit, you would have to collect for any damages. 

Your lease should also be clear that the security deposit is not to be used for last month rent.  I have had tenants ask to do this quite a few times. I have had one that did not pay last month’s rent so I started the eviction process mostly to scare her.  She paid the rent and associated late fee.  Just because they are at the end of lease does not imply the lease is not to be followed.  

Good luck

Hey John! 

The security deposit is crucial and covers the cost of damages or repairs, I would not waive the deposit.

For last month rent being charged up front, I understand the concern of charging the tenants too much up front with the deposit, first months rent, and last months rent. I would clearly outline a lease break fee if the tenants want to move out early instead of charging last months rent upfront. Collecting last months rent gives you peace of mind that they will not leave early without paying, but if you have a lease break fee in your lease it would cover you.