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We are trying to rent out our house and have two potential renters interested.
One of the renters has offered full asking price for the rental, and the other has offered a bit under but the whole year paid in advance up front.
Have any other landlords been offered this? I can think of a lot of pros for the landlord, but not a lot of cons. Is there anything I am overlooking? A year's rent is a large sum of money - are there tax implications to taking it up front instead of on a monthly basis?
We are trying to rent out our house and have two potential renters interested.
One of the renters has offered full asking price for the rental, and the other has offered a bit under but the whole year paid in advance up front.
Have any other landlords been offered this? I can think of a lot of pros for the landlord, but not a lot of cons. Is there anything I am overlooking? A year's rent is a large sum of money - are there tax implications to taking it up front instead of on a monthly basis?
Any thoughts?
Thanks!
The advance payer probably has shot credit,but I would go ahead and take it. You might want to try to get a reference from a previous landlord. If they change their story after agreeing, i.e. they DON'T give you what they dangled in front because of (insert excuse here), that is a big red flag. Be sure and get cash or a Post Office money order. Cashier's checks are worse than personal checks. Get ALL the money before you give them the keys.
Your biggest issue is whether your state's landlord/tenant code allows you to basically spend unearned money. Many people pay rent up front for various reasons, but in Hawaii we are not allowed to demand it,and if they want the unearned portion back at any time it must be refunded. The money should be put in one account, then the income charged off monthly into the operating account, just as if they had brought it in on the 1st every month.
Treat every person the same every time. Run your credit checks, verify income, call references and make your decision based on a policy that you enforce equally to everyone.
Of course if your state allows you to ask for rent in advance as an alternative because of bad credit or difficult to prove income, it's your call.
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