Paying cash for entire lease up front discount? (apartments, tenant, renters)
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I have never rented before so I am not sure how this works but I'm wondering if its appropriate to offer the cash value of the lease up front for a discount. For example, this place is 1,145 a month for 6 months. That's 6,870. Would offering 6,500 in cash be an insult? Do people do this at all? Just trying to get a feel. Thanks
In short, you lose your leverage if/when problems crop up.
Beyond that it's a sign that the applicant has credit or income legitimacy issues.
Who loses leverage. Myself as the renter? I could understand that but as the landlord it's a benefit as far as I'm
concerned. And I would be providing a credit report as well as my mortgage statements because I have nothing I hide.
I just googled it which I should've done in the worst place. The worst thing about doing it as I mentioned is if the homeowner doesn't pay the mortgage and you get kicked out.
Who loses leverage. Myself as the renter? I could understand that but as the landlord it's a benefit as far as I'm
concerned. And I would be providing a credit report as well as my mortgage statements because I have nothing I hide.
Because kicking you out would be a major pain in the ass.
Wanting to pay rent up front like that raises a huge, huge red flag. It's says that you have something to hide.
I know someone who prepaid for an apartment lease, at a higher monthly rate. But that was in Avery competitive market, where bidding wars were sparked even for apartments.
It isn’t always an incentive to the property owner to have the rent prepaid. If your state sets the maximum amount of advance payments (any money paid in advance such as last month and security deposits) often times the tenant has the right at their discretion, to request a refund of any advance payment above the maximum legal amount allowed under the law.
Let’s say the rent is $100.00. You offer $1,235, all at once, which represents the entire 1 year lease plus 1 month security deposit at a discount rate of $95 a month. The law says the owner can only legally retain 2 months’ rent and 1 month security deposit. The owner accepts your discount and advance payment. Now, 3 months into the lease you request a refund of the amount above the 2 months plus security deposit. The property owner is now required to refund the overage yet is still stuck charging the agreed upon amount of $95 a month instead of $100. Even if the lease lets them raise the rate to the actual amount, you can stop paying or do other things and the owner who accepted you based on the prepayment, is stuck with a deadbeat as bad as someone paying monthly.
My sister got new renters awhile ago. Their rental is right next door, so they aren't distant LL's. Folks paid deposit and 1st / last in cash and then moved in. The next morning, they came over and asked what the rent was each month again and then pulled out a roll of cash and peeled off enough to cover the one year lease.
My sister and BIL were very happy about it...they get to bank the money and collect the interest from it for a whole year. It's been a few months and they are happy with the renters.
I never thought about the other issues brought up here. I think, if I was a LL, it would raise red flags for me if someone proposed prepaying that far in advance.
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