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I am the landlord. I just posted an ad and I am concerned asking for 2 months of security may deter good tenants. It comes to almost five thousand dollars. I went from a studio to a house so I never had to deal with high numbers. The rent is quite competitive but I am not sure if the extra rental payment is feasible. I am following the industry standard to screen applicants but I never had to do any of this. I want to be fair but I have to protect myself. Any insight would be most appreciated.
The norm in my area is first, last and one month's security, if that helps. Security in the amount of two month's rent would be unusual and probably a deterrent.
I am the landlord. I just posted an ad and I am concerned asking for 2 months of security may deter good tenants. It comes to almost five thousand dollars. I went from a studio to a house so I never had to deal with high numbers. The rent is quite competitive but I am not sure if the extra rental payment is feasible. I am following the industry standard to screen applicants but I never had to do any of this. I want to be fair but I have to protect myself. Any insight would be most appreciated.
Have you verified that 2 months of "Security Deposit" is legal under your state law?
If the normal is 1 month "Security Deposit", you will get a certain amount of qualifed candidates who will pass you by because they view it as excess and may think your hard up for money or simply overcharging. You will get another group that may be qualified but due to circumstances, are not willing or able to get their hands on the cash needed for that extra month.
But first, check the laws of your state on security deposits, accounting of security deposits, notification and all the other stuff on this subject.
It is legal in my state but the upfront cost is high. I've already scared away two potential tenants. I lowered it to an amount that is slightly higher than the rent. I have no desire to price gouge; I just want the tenant to have some skin in the game.
I insist on a security deposit in the amount of two months rent because that is about how long it takes to get rid of a deadbeat tenant in VT. Yes it scares potential tenants away but I'd rather leave the place empty for a month then get a lowlife in who won't pay rent and makes it hard to get them out. Fortunately I am not in Burlington or Barre, where the amount of the secutiry deposit is limited.
Other states make it much easier and quicker to oust a deadbeat. If you doesn't take as long or cost as much to get rid of a bad tenant, maybe you can go with a lower number.
Two months is a lot. However, unless it's the limit in your state, I wouldn't go as low as one month's rent. What we did with our rental house was set the deposit a few hundred higher than the rent, and the rent a little lower than the market seemed to require (in exchange for them signing a two-year lease).
The lower rent will hopefully keep them there longer, and the higher deposit will help with the cleaning, which we can already see there will be a lot of. Like you, we wanted them to have some "skin" in the game (higher deposit, longer lease), but we also wanted to make it attainable.
In my experience it has been at times first month and last month rent for the deposit in addition to the current month you are moving in. It depends on other factors as well but that does not sound unreasonable to me from the little information you have provided.
Two months is a lot. However, unless it's the limit in your state, I wouldn't go as low as one month's rent. What we did with our rental house was set the deposit a few hundred higher than the rent, and the rent a little lower than the market seemed to require (in exchange for them signing a two-year lease).
The lower rent will hopefully keep them there longer, and the higher deposit will help with the cleaning, which we can already see there will be a lot of. Like you, we wanted them to have some "skin" in the game (higher deposit, longer lease), but we also wanted to make it attainable.
That is the approach I am taking except it will be a month to month lease.
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