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Hi all, reviving this old thread. Have my home on the market and a prospective tenant with family has appeared (been on the market less than a week). Long story short, his company is willing to pay the entire lease term up front. Security deposit and all. Tenants have excellent credit and from FB they seem like good people and have excellent jobs.
Bad news is that it is only an 8 month lease (they are building a home of their own)...should I wait out for a 12 month+ lease? This means my home would be on the market again in February which I know is not the best time.
Any and all advice is appreciated!
One of the biggest red flags I ever see is someone offering this. And no, there are no discounts. The rent has to be posted to the owner month by month - no one gets all of it at once because you can't spend unearned income.
Wanting to pay rent up front like that raises a huge, huge red flag. It's says that you have something to hide.
What if I had the money from inheritance? What if I won it at a slot machine? What if I got promoted and got a huge bonus? What if I wrote a novel and got an advance for that amount? What if I built a website and sold it for that much? What if I applied for a scholarship and got that much from it? If I had something showing you that proves whatever I claim, that would be acceptable?
What if I had the money from inheritance? What if I won it at a slot machine? What if I got promoted and got a huge bonus? What if I wrote a novel and got an advance for that amount? What if I built a website and sold it for that much? What if I applied for a scholarship and got that much from it? If I had something showing you that proves whatever I claim, that would be acceptable?
There are these businesses in every town called BANKS. you can open an account with your lump sum money and then withdraw the amount for rent each month. Weird, crazy idea I know.
for single family homes in my area, the "average" tenant stays for 4.7 years. The cost to hire cleaners, paint & "fluff" to re-rent is nearly the same if your tenants stay 6 months, or 6 years, plus - with short-term tenants, you might have to argue with them about what "reasonable wear & tear" is for things like carpet. If they stay for 5+ years, you got your money out of your paint & carpet.
So I'd decline this tenant & any other that clearly expressed an interest in leaving, even at 1 year.
Your best tenants will have new $600 phones, two new cars with payments, the "ultimate" cable TV package, jobs good enough to pay the rent, but no money in the bank. Big credit-card bills are a plus if you're the landlord.
I was a horrible tenant, not because I trashed the places I rented (actually left them spotless) but because I had enough money to move & buy when the prices were right. Your best tenants want to buy their own house "someday" , but they probably don't have 802 fico scores, or a plan of how to come up with a down-payment.
i.e. the best tenants are rent slaves you can exploit long-term
As a landlord, tenants wanting to pay months in advance is a red flag for me because I feel it increases the risk. From my perspective.
1. We are creatures of habbits. I rather have tenants who are used to paying rent on a regular basis than having them not worry about rent for 6 months and then have nothing for me in month number seven. Now I assume we are talking about regular rentals here.
2. When I rent out a place, I am looking for long term.. 2-3 years min. It doesn't help me to have guarantee 6 months of rent and then have to find new tenant.
I pay rent to a non-owner who deals entirely in cash. (he's a middleman who enjoys a spread between the rent he collects and the rent he pays) Every month I have to make a special trip just to withdraw cash in order to pay rent. I'd rather pay in advance and avoid the hassle, unless I can get a discount for the monthly hassle.
I've got no motivation to accept a year's rent in advance. It's not like I can use that money to buy myself a new car. It has to go into a savings account, earning 0.01% interest, because I have to take out a chunk every month to pay the mortgage, the taxes, the insurance, and the repairs. I still have to pay full price for the mortgage, so why would I give the tenant a discount when all of my expenses stay the same?
A full year paid up in advance makes the tenant more difficult to get rid of if he is a real PITA. It might be possible to get him out on other grounds (with a refund of advance rent, another reason I can't just spend the money) but then he is telling the judge that he should be allowed to stay because he has already paid the rent and the landlord accepted the rent from him. It's just a lot more difficult.
The only people who have ever offered me advance rent are tenants that no sane landlord would ever accept. They hope that the big chunk of cash will prevent the landlord from checking their references or credit.
The people who grow dope, run a drug house, film porno films, or run an undocumented alien flop house pay in advance so that the landlord won't come around to see what they are doing.
There are lots of negatives to a big chunk of advance rent.
I would accept rent by the quarter from a full time student who was living off of Pell grant money. That would be to get mine before the tenant spends it all. However, even though I have had several Pell grant applicants, every one of them who wanted to pay rent in advance screened with multiple red flags and I would not have accepted them, anyway.
I had a couple of grad school buddies do this while we were in school. Because we were in school/students, I think the landlords were more willing to allow this to happen. Generally, I'd allow it for a student situation or for a situation where the individual has a very high paying job. Otherwise, the downsides outweigh the positives in my book. And, note, I'm not offering a discount either.
I've got no motivation to accept a year's rent in advance. It's not like I can use that money to buy myself a new car. It has to go into a savings account, earning 0.01% interest, because I have to take out a chunk every month to pay the mortgage, the taxes, the insurance, and the repairs. I still have to pay full price for the mortgage, so why would I give the tenant a discount when all of my expenses stay the same?
A full year paid up in advance makes the tenant more difficult to get rid of if he is a real PITA. It might be possible to get him out on other grounds (with a refund of advance rent, another reason I can't just spend the money) but then he is telling the judge that he should be allowed to stay because he has already paid the rent and the landlord accepted the rent from him. It's just a lot more difficult.
The only people who have ever offered me advance rent are tenants that no sane landlord would ever accept. They hope that the big chunk of cash will prevent the landlord from checking their references or credit.
The people who grow dope, run a drug house, film porno films, or run an undocumented alien flop house pay in advance so that the landlord won't come around to see what they are doing.
There are lots of negatives to a big chunk of advance rent.
I would accept rent by the quarter from a full time student who was living off of Pell grant money. That would be to get mine before the tenant spends it all. However, even though I have had several Pell grant applicants, every one of them who wanted to pay rent in advance screened with multiple red flags and I would not have accepted them, anyway.
If I have unfixable credit, what better option do I have?
If I have unfixable credit, what better option do I have?
Continue posting the same saga, that works.
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