Posted by David -S on March 09, 2000 at 17:28:08:
It’s been quite some time since I’ve seen or heard from you. Good to see you are still working your area and doing deals.
After taking some time off to get my business on the right track, I just so happen to have time for another business. Any Ideas?
David S
When to collect deposit for apartment - Posted by Shenesa
Posted by Shenesa on March 06, 2000 at 12:00:29:
Hello Again,
I was wondering when selecting a tenant, how much and when would one collect a deposit for the apartment? Should one collect a full month security deposit and collect the first months rent before you hand over the keys? I’m a little confused because I know that you should collect money to secure the apartment for the perspective but should it be a deposit of some sort or the full security deposit upon the signing of the lease? Also once the lease is signed and the the tenant has a change his/her mind do I keep the security deposit?
Thanks,
Shenesa
Re: When to collect deposit for apartment - Posted by Rob FL
Posted by Rob FL on March 06, 2000 at 20:50:04:
Here is how I do it for whatever that’s worth.
I ask for the full deposit at the time the lease is signed. If for some reason they can’t come up with it and I think they are a decent prospect, I will take 1/2 now and 1/2 some time before they get the keys. They never never never never (read it again N-E-V-E-R) get the keys until they have given me the full deposit and the first month’s rent.
As far as deposit amounts, I usually try to make it slightly less than 1 month’s rent. If rent is $600, deposit would be $550 or so. The reason being is that at the end of the lease, this makes it pretty difficult to stiff me for the last month’s rent by just telling me to take the deposit in lieu of the rent. After all, they are still short some $$$.
If the tenant does have pets or credit problems or whatever, then I either get more deposit, higher rent payments, or both.
Re: Did you decide to keep the two-unit? nt - Posted by Stacy (AZ)
Posted by Stacy (AZ) on March 06, 2000 at 14:22:01:
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Re: When to collect deposit for apartment - Posted by Bert G
Posted by Bert G on March 06, 2000 at 13:20:51:
Get as much deposit as the law and your concience will allow. (ei, inmy state, deposit cannot exceed one month rent). Dthe deposit shoue NOT be exactly the same amount as a month’s rent, otherwise the tenant will try and use it as rent.
Of course everything, security deposit, rent, etc must be paid in full before you hand over the keys . (how do you think I know this?)
BG
Re: When to collect deposit for apartment - Posted by steve
Posted by steve on March 06, 2000 at 13:03:48:
By all means, get the $$ before you hand over keys.
In the event the tenant changes his/her mind, you can usually retain only those costs and/or damages you actually incurred, whether or not you specified a nonrefundable component to your deposit. Those might include the costs of readvertising the property and the rent until you are able to get another lessee. You also have to make a good-faith effort to get another tenant. You can try and keep all the deposit, but even a mediocre legal-aid attorney will jump all over that and make you look avaricious and unsympathetic in court.
Re: When to collect deposit for apartment - Posted by Tim (Atlanta)
Posted by Tim (Atlanta) on March 06, 2000 at 12:35:06:
Here’s what I do :
Collect a $25 non-refundable application fee from the prospective tenant at the time of application.
If the application and credit report are approved, I contact the tenant and get a non-refundable $100 deposit to hold the unit until move-in. I never hold the unit for over a month.
At move-in, I apply the $100 deposit in step 2 to the move-in costs. Move in costs are security deposit plus first month’s rent. All move-in funds are to be in certified funds or cash. NO personal checks on move-in. Then and only then does the tenant get the keys.
Prospects will test you on this, but I stick to it. NEVER give the keys to a tenant until you have all of the funds in your hands.
Just my .02
Re: When to collect deposit for apartment - Posted by Shenesa
Posted by Shenesa on March 06, 2000 at 13:06:57:
Thanks for the advice. I really appreciate it.
wait a minute… - Posted by David S
Posted by David S on March 06, 2000 at 20:55:53:
Tim,
Are you saying that I could tie up your property for up to a month for $125?
NO WAY would I ever consider doing that for anyone. If they want my home, they pay the total TODAY. I refuse to “hold” property. PERIOD! I’m not going to waste my time with them if they don’t have the money.
In addition, the security deposit is always $100 MORE than one months rent, PLUS pet deposit.
David S
Re: When to collect deposit for apartment - Posted by Shenesa
Posted by Shenesa on March 06, 2000 at 13:08:35:
Thanks for you .02.
Shensa
You didn’t ask… - Posted by steve
Posted by steve on March 06, 2000 at 13:30:15:
…but do NOT call the deposit anything but a ‘security deposit’. If you call it “last month and security deposit”, you just reduced your security deposit by a full month’s rent, and possibly locked yourself into a lesser rent amount for the last month. Similarly, if you call it “key deposit, cleaning deposit, and security deposit”, your security deposit will be reduced by the cost of cutting a new key and the costs of cleaning.
State or local laws will set the maximum security deposit, but the market will tell you if you should be at the maximum or something less.
Re: wait a minute… - Posted by Tim (Atlanta)
Posted by Tim (Atlanta) on March 07, 2000 at 06:53:32:
It is not a matter of people not having the money. They just can’t leave their current place without giving proper notice. Maybe it is just a difference in the market, but you can’t expect people to up and leave their current place, screwing their current landlord out of a month’s rent, and then be great tenants for you. Most of the times that I have hade people want to rent my place quickly, they have been deadbeats.
Just my experience.
Re: You didn’t ask… - Posted by Shenesa
Posted by Shenesa on March 06, 2000 at 13:46:13:
Thanks so much,
No I did not ask, but I sure do appreciate the information.
Much Success!
Shenesa
you’re kidding, right… - Posted by David S
Posted by David S on March 07, 2000 at 08:26:59:
It’s not that there’s a difference in the market Tim, but a difference in the marketing and management.
I would never rent to anyone that didn’t give the prior landlord proper notice, and yes I check with them.
Here’s the skinny, as I stated in a previous post: I do NOT hold property for anyone, PERIOD! If you want to rent from me, you must pay in full within 3 days.
I do NOT care if they have to pay double rent. I don’t always think it’s fair, but it’s not my place to lose money if they decide to move. These people are lucky to have an opportunity to live in one of my properties. I maintain them; offer rental DISCOUNTS for timely pay; FREE pizza’s if you pay on time for 3 months; FREE 19" color tv or a VCR when you’ve been a resident for 12 months (no lates), etc. Last year, I bought ALL of my tenants Apple Pies for Thanksgiving, even the (one or two) that pay late on occasion.
The bottom line Tim; I have a good marketing and management system. There are a ton of properties that are “cheaper and in better areas”, but few in my area have devoted as much time to their marketing and management as I have. It’s BIG FUN!
Prior to looking at property, my manager sits the prospect down and goes through the “system” with them explaining everything. When it’s over, they are SOLD on the system. Then, we ALLOW them to live in whatever we have available.
So, the question is, how bad do they want to live with us, in one of OUR properties, and be a part of our SYSTEM?
This doesn’t mean that I don’t have a vacancy on occasion myself, sure I do. But this type “mindset” not only increased my income, but reduced my tenant turnover. Did it cost me anything? Sure, a phone call and some time (ever negotiated to buy a truck load Apple pies?), but the increase in rents allowed by having such a system sure offsets any expense.
Develope a marketing and managment system Tim. Educate yourself. It will change the way you look at the rental market.
David S
Re: Should we start calling you Mr. Landlord II, Dave - Posted by Millie I.
Posted by Millie I. on March 09, 2000 at 16:02:04:
I am losing track of how many businesses you are in.
Big Smile,
Millie I.