tenants who want sec dep applied to last month rent

General Real Estate Investing
1

what do you guys tell you’re residents when they say to just apply their security deposit to their last month rent

I’ve got an abundance of those this turnover season

thanks

2

Absolutely positively NOT!!! How are you going to recover money from them when they move out and you find damage?
This is explicitly listed in our policy sheet and lease.

3

Find out what other landlords in your area are doing. Each area has different market conditions and it’s not a hard and fast rule. Call their listings and ask as a potential tenant. What are the landlords in your area saying when you ask? What’s the condition of the units they are allowing it for? I only get first/last month’s rent + key deposit. I can’t even ask for a security deposit… You have to be realistic with the market conditions for the area if you don’t want to end up with empty properties all season.

4

I’d turn their deposit over (assuming no damage) and get them to pay it back to me. I know it’s an extra step, but at least it’s documented.

CYA = cover your own ass

5

I agree with justin. Two totally seperate transactions on the books. Have them pay rent. If the final inspections looks good they get their security back which is basically a months rent they wrote off anyway. If its a bad walkthrough you deduct some and they get half (or whatever is comes out to be) of their deposit back. If they’ve been there for long enough its a win-win situation.

I actually stick my tenants deposit in an interest bearing account and tell them when they get it back they get the deposit PLUS the interest they’ve accrued. Haven’t had many people offer to give up that free $$ as of yet…

6

The SD is governed by your state’s laws. Some allow the SD to be used as rent. Some are silent. Never agree to it unless your state requires it.