Pay full lease up front?
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Pay full lease up front? (by Hoosier [IN]) Feb 18, 2021 10:50 AM
       Pay full lease up front? (by Rick [IN]) Feb 18, 2021 10:52 AM
       Pay full lease up front? (by Oregon Woodsmoke [ID]) Feb 18, 2021 11:00 AM
       Pay full lease up front? (by Jim in O C [CA]) Feb 18, 2021 11:01 AM
       Pay full lease up front? (by S i d [MO]) Feb 18, 2021 11:19 AM
       Pay full lease up front? (by RB [MI]) Feb 18, 2021 11:49 AM
       Pay full lease up front? (by myob [GA]) Feb 18, 2021 1:41 PM
       Pay full lease up front? (by Hoosier [IN]) Feb 18, 2021 1:44 PM
       Pay full lease up front? (by Kevin [FL]) Feb 18, 2021 3:03 PM
       Pay full lease up front? (by Mike45 [NV]) Feb 18, 2021 3:26 PM
       Pay full lease up front? (by Hoosier [IN]) Feb 18, 2021 3:33 PM
       Pay full lease up front? (by Kevin [FL]) Feb 18, 2021 3:49 PM
       Pay full lease up front? (by Hoosier [IN]) Feb 18, 2021 4:04 PM
       Pay full lease up front? (by myob [GA]) Feb 18, 2021 4:59 PM
       Pay full lease up front? (by Hoosier [IN]) Feb 18, 2021 7:02 PM
       Pay full lease up front? (by 6x6 [TN]) Feb 18, 2021 8:28 PM
       Pay full lease up front? (by Hoosier [IN]) Feb 18, 2021 8:33 PM
       Pay full lease up front? (by Barb [MO]) Feb 18, 2021 10:48 PM
       Pay full lease up front? (by BRAD 20,000 [IN]) Feb 19, 2021 12:22 AM
       Pay full lease up front? (by Hoosier [IN]) Feb 19, 2021 3:07 AM
       Pay full lease up front? (by Oregon Woodsmoke [ID]) Feb 19, 2021 11:25 AM
       Pay full lease up front? (by Wilma [PA]) Feb 19, 2021 4:47 PM
       Pay full lease up front? (by Hoosier [IN]) Feb 19, 2021 5:46 PM
       Pay full lease up front? (by James [NC]) Feb 20, 2021 4:32 PM

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Pay full lease up front? (by Hoosier [IN]) Posted on: Feb 18, 2021 10:50 AM
Message:

I had one applicant offer this once, but they did not meet our criteria...so I've never done this.

But, if you offer 1-year leases, and an otherwise qualified tenant says "I'll pay the entire 1-year lease up front", what are the downsides to accepting this?

If they do this, and then violate the lease after several months, would you be able to evict for cause and simply refund them any un-used portions of this money?

Other issues?

--99.92.xxx.xxx




Pay full lease up front? (by Rick [IN]) Posted on: Feb 18, 2021 10:52 AM
Message:

Yes (Probably, depends on the judge.) --50.229.xx.xxx




Pay full lease up front? (by Oregon Woodsmoke [ID]) Posted on: Feb 18, 2021 11:00 AM
Message:

People who offer a full year in advance are hoping to blind the landlord with greed so the landlord will not look too closely at the application.

Good decent tenants with sufficient income to pay their rent never offer extra months payment in advance. It just never occurs to them to do so.

I don't see a lot of advantage to it, anyway. It doesn't make your bills go down or your income go up. It doesn't even guarantee you a whole year of rent on time because if the tenant is truly awful and you evict him, the courts are going to make you give the unused rent back.

The only way I would take advance rent would be from a student who was paying with grant money by the semester (and I don't take students, so that doesn't apply) --76.178.xxx.xxx




Pay full lease up front? (by Jim in O C [CA]) Posted on: Feb 18, 2021 11:01 AM
Message:

Well you canít evict for non-payment. This kind if offer concerns me just like applicants that wave cash around to sucker you in to accepting them.

I had one applicant that suggested since he was paying in cash I could claim I received part and pocket the rest. No thanks!! --99.23.xxx.x




Pay full lease up front? (by S i d [MO]) Posted on: Feb 18, 2021 11:19 AM
Message:

You will find a lot of helpful (and humorous) dialog on this same topic under WMH's thread "Paying in Advance Really" from yesterday.

I don't like to use an upfront year's rent as an excuse to let an otherwise bad tenant in. The only reason I take significant amounts as paid in advance is if there's a valid reason, such as a college student who gets once-per-semester aid/scholarship disbursements.

Usually, a pile of cash is a signal that someone is either desperate or a very poor manager of money. I don't want either one. Also, a bad tenant can easily cause more than a year's worth of rent in damages to a unit, then you're left holding the bag plus evicting, and likely by then all their money is gone.

--107.216.xxx.xxx




Pay full lease up front? (by RB [MI]) Posted on: Feb 18, 2021 11:49 AM
Message:

From my own experiences,

after using the screen x3 process,

including a Private Investigator,

the 3- times I accepted a 1- year, rent paid in advance,

it was successful on both ends.

They all left after their 1- year agreement

and bought their own homes. (No surprise to me)

Would I do that in todays world ?

Odds are, NO.

--199.192.xxx.xxx




Pay full lease up front? (by myob [GA]) Posted on: Feb 18, 2021 1:41 PM
Message:

yes several times-- especially people JUST moving to town. Have done many paying 6 months up front on a year lease. We make those funds the last 6 months and they must still pay every month on the first. --99.103.xxx.xxx




Pay full lease up front? (by Hoosier [IN]) Posted on: Feb 18, 2021 1:44 PM
Message:

Thanks for all the comments --99.92.xxx.xxx




Pay full lease up front? (by Kevin [FL]) Posted on: Feb 18, 2021 3:03 PM
Message:

Hoosier, I asked this question several years ago and got a great response. I had a woman that wanted to rent my new pool home but had some past due credit cards. The group explained if she filed for personal bankruptcy the trustee will request I return all unused funds. --47.205.xxx.x




Pay full lease up front? (by Mike45 [NV]) Posted on: Feb 18, 2021 3:26 PM
Message:

I had one tenant who had been fully screened and approved. About two months into the tenancy, he told me "I just got a personal injury lawsuit settlement and I want to pay 10 months rent in advance." It was fine with me. At the end of the ninth month, I wrote to remind him that he had paid ten months in advance and that his month payments should resume on __[date]__. He then paid me six more months in advance, before resuming monthly payments.

There was no downside in this situation.

--71.38.xx.xxx




Pay full lease up front? (by Hoosier [IN]) Posted on: Feb 18, 2021 3:33 PM
Message:

Thanks

Kevin, yes thatís a risk but no more than if she filed bankruptcy when she was paying each month, right?

--99.92.xxx.xxx




Pay full lease up front? (by Kevin [FL]) Posted on: Feb 18, 2021 3:49 PM
Message:

My risk was letting her in with questionable problems and thinking no downside with getting 12 months of cash up front. --47.205.xxx.x




Pay full lease up front? (by Hoosier [IN]) Posted on: Feb 18, 2021 4:04 PM
Message:

Ok, thanks for clarifying --99.92.xxx.xxx




Pay full lease up front? (by myob [GA]) Posted on: Feb 18, 2021 4:59 PM
Message:

I've had the BK concern for many years. Several tenants have declared BK but in every case the Trustee has instructed that rent be paid. Once that happens they can't miss payments because they will be violating the BK agreement. Thrown off BK protection.

In all seriousness think about the BK scenario. Your going to check out this person anyway-- you should be able to see the likelihood of BK declaration by using your due diligence. --99.103.xxx.xxx




Pay full lease up front? (by Hoosier [IN]) Posted on: Feb 18, 2021 7:02 PM
Message:

I agree myob...but I admit I had one slip through the cracks...she checked out great on paper but ended up filing BK. Long story, but I got all the funds that were due to me. --99.92.xxx.xxx




Pay full lease up front? (by 6x6 [TN]) Posted on: Feb 18, 2021 8:28 PM
Message:

I did 6 months upfront with a student a few years back. She did move 6 months but was a horrible tenant. I have to take the blame for not screening well.

My current tenants paid six months up front and were recent grads and the male half was an obvious saver and budgeted and they have been fine. I screened better as well but could still do better.

I have never done a full year upfront but I would think that screening really well would apply but then again, it should anyway. --73.120.xx.xxx




Pay full lease up front? (by Hoosier [IN]) Posted on: Feb 18, 2021 8:33 PM
Message:

Thanks 6x6,

The fact you are improving screening means you are learning. On the two evictions Iíve had in 14 years, I still donít know how I could have seen it. Sometimes itís hard to catch. --99.92.xxx.xxx




Pay full lease up front? (by Barb [MO]) Posted on: Feb 18, 2021 10:48 PM
Message:

I took a full year from a newly widowed woman a few years ago. She had lost her husband only a month before and needed to move to town to be closer to family, she was moving from 45 miles away. She didnít have a job because she had lost it when the husband became ill. But she had a small life insurance policy and paid the first year.

She is still with me. Not awesome, but she is about to start year 5 in a difficult to rent home. When she moves out, Iíll likely sell the home. --67.43.xxx.xxx




Pay full lease up front? (by BRAD 20,000 [IN]) Posted on: Feb 19, 2021 12:22 AM
Message:

Hoosier,

My recent two year-ers were from out of town with only one in the couple working, the partner still looking/interviewing so not enough income to qualify today. Both couples moving back to hometown, closer to family.

One had inheritance money, the other from an insurance settlement.

Both in affordable housing, not high dollar. Fully employed in a few months.

Screened normally, just short on income during the application period.

Remembering two a few years ago. Both in wheelchairs with huge accident quarter mill settlements.

Just had a similar one today. Fresh divorce, trying to get organized, will pay 6 months up front to make up for no rental history - owned their home.

Downside? Their rent is paid and we SELDOM have behavior problems.

If things went sour we could refund unused monies.

BK: my experience thru many BK renters is the atty says to use up all their savings toward future rent because the court will seize any cash. The courts allow them to continue to pay rent to keep a place to live.

BRAD --73.102.xxx.xxx




Pay full lease up front? (by Hoosier [IN]) Posted on: Feb 19, 2021 3:07 AM
Message:

Thanks Brad --99.92.xxx.xxx




Pay full lease up front? (by Oregon Woodsmoke [ID]) Posted on: Feb 19, 2021 11:25 AM
Message:

I had a carefully screened and well qualified tenants show up to the lease signing with four months rent, $6400, all in cash. Plus $1900 for the security deposit and I was awfully nervous as I rushed to the bank to get it put safely away.

I took that, but he'd never offered extra rent or deposit to sway my decision and he screened really well. The advanced rent was a surprise.

I suspect that he doesn't like the banks. Every now and again he pays the rent in cash. His credit is excellent and he doesn't have any judgements, so he isn't hiding money from creditors. Oh well. I'll take the rent any way I can get it.

Every other applicant that wanted to throw wads of cash at me had evictions and/or criminal record, or their income came from something illegal.

Right now, wads of advance rent are most likely rent that was never paid to the landlord where they are leaving. --76.178.xxx.xxx




Pay full lease up front? (by Wilma [PA]) Posted on: Feb 19, 2021 4:47 PM
Message:

Check your state laws. In PA, we can't accept more than a total of two months rent and one month security unless there is some financial advantage to the renter.

Example: I had a woman whose divorce was pending. She had an excellent, long-term job and strong references, great credit. But as the divorce and child custody was not settled, there was a chance that she would not be able to afford to stay after everything was finalized. It was our idea to offer a six month lease, prepaid. We kept the rent at our usual one year lease rate, rather than our higher short-term rate. This satisfied this PA requirement. The agreement then went to month-to-month. She paid the six months up front(loan from her family)stayed 2 years, then bought a house. --172.58.xxx.xx




Pay full lease up front? (by Hoosier [IN]) Posted on: Feb 19, 2021 5:46 PM
Message:

Thanks Wilma. When I first started landlord and I read the entire landlord tenant law and donít remember seeing anything out in there about this. But I can double check I donít think thereís going to be anything in there. --99.92.xxx.xxx




Pay full lease up front? (by James [NC]) Posted on: Feb 20, 2021 4:32 PM
Message:

I have had several people offer it and I have only ever accepted it one time. As others have pointed out, it is usually a bad sign, either because the tenant is not qualified or because they are trying to negotiate the monthly rate down.

If the situation makes sense, I would consider it again.

In the case of the one that I accepted, tenant was a married couple that were well qualified based on screening, had high credit and stable jobs. They had two down sides though, they had a doberman and only wanted a 9 month lease. They had recently sold their home and were in the process of building a new one. They were smart enough to realize the difficultly they were having finding a place with those 2 downsides, so they offered slightly above my asking rent, pre-paid.

On my end, this was at the start of the Covid shutdown and I had hoped the prepayment would get me through the end of it. At that point, only terrible applicants were surfacing, so I negotiated to 10 months and required renters insurance on the dog. Thus far, they have been model tenants and due to covid, their construction was delayed, so they extended for another 4 months (again, prepaying). --67.197.xxx.xx



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