Not collecting deposits
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Not collecting deposits (by BRAD 20,000 [IN]) Feb 17, 2024 12:54 AM
       Not collecting deposits (by plenty [MO]) Feb 17, 2024 7:22 AM
       Not collecting deposits (by Sisco [MO]) Feb 17, 2024 8:26 AM
       Not collecting deposits (by Still Learning [NH]) Feb 17, 2024 8:31 AM
       Not collecting deposits (by S i d [MO]) Feb 17, 2024 11:34 AM
       Not collecting deposits (by Oregon Woodsmoke [ID]) Feb 17, 2024 11:49 AM
       Not collecting deposits (by BRAD 20,000 [IN]) Feb 17, 2024 1:44 PM
       Not collecting deposits (by Renne [TX]) Feb 17, 2024 5:47 PM
       Not collecting deposits (by zero [IN]) Feb 17, 2024 6:48 PM
       Not collecting deposits (by Jason [VA]) Feb 17, 2024 7:04 PM
       Not collecting deposits (by 6x6 [TN]) Feb 17, 2024 7:51 PM
       Not collecting deposits (by 6x6 [TN]) Feb 17, 2024 7:52 PM
       Not collecting deposits (by BRAD 20,000 [IN]) Feb 17, 2024 10:41 PM
       Not collecting deposits (by BRAD 20,000 [IN]) Feb 17, 2024 10:48 PM
       Not collecting deposits (by Ken [NY]) Feb 18, 2024 7:55 AM
       Not collecting deposits (by Jeffrey [VA]) Feb 18, 2024 10:04 AM
       Not collecting deposits (by Sisco [MO]) Feb 18, 2024 2:09 PM
       Not collecting deposits (by 6x6 [TN]) Feb 18, 2024 4:38 PM
       Not collecting deposits (by zero [IN]) Feb 18, 2024 6:44 PM
       Not collecting deposits (by WMH [NC]) Feb 18, 2024 10:34 PM
       Not collecting deposits (by Ray-N-Pa [PA]) Feb 19, 2024 3:46 PM

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Not collecting deposits (by BRAD 20,000 [IN]) Posted on: Feb 17, 2024 12:54 AM
Message:

Lots of great comments about LLs collecting double deposits.

For your consideration... Mine is the exact opposite. No deposit.

We charge a Non-Refundable Rent Lock Fee equal to one month's rent. This fee gets them a year lease and we lock in the rent, no increases for 12 full months. No fee, no lease.

Many large PM companies are now charging Document Fees, Leasing Fees, etc.

So I keep the money no matter what. I made profit of a month of rent even before I hand them the keys.

I use WMH's Queen of Turnover techniques of setting expectations at move out. We pay as much attention to procedures at move OUT as we do at move IN. Move out checklist in the lease, $75 per hour for cleaning and repairs, send them copies of what they signed at move in, deeply screened applicants and In Home Visits to get clean people, good communication...We also offer a $100 bonus if they leave it PERFECTLY hotel clean, ready for the next resident.

Most homes come back clean and ready to rent without holding a deposit over their heads.

AND I made money with the Rent Lock Fee.

ZERO TOLERANCE on lates makes a big difference cuz they don't owe money or maybe just a little.

I still charge for cleaning and repairs as normal. Amounts are MUCH smaller than when I took deposits so maybe it's a few hundred dollars and they just pay it without court.

How many times have we heard "Just take the last month's rent out of my deposit"?

National Apartment Assoc survey showed most renters do not expect to get their deposit back - it's "Spent money." in their minds.

I learned a lesson. Son#1 was responsible to pay his own deposit of $475 at this college apartment. On a visit I asked if he planned to clean his (awful!) shared bathroom so he could get his deposit back. As a 5th year senior he replied "Nah, just gonna leave it. That's what deposits are for."

Think about it.

BRAD --73.103.xxx.xxx




Not collecting deposits (by plenty [MO]) Posted on: Feb 17, 2024 7:22 AM
Message:

If you know where there moved to so you can collect. As now collections is your business focus. However I will say I did this once for my sister, double first month's rent, no deposit, then she sold the building and there were no deposits to transfer. So the buyers out there beware of that trickery. --172.59.xxx.xx




Not collecting deposits (by Sisco [MO]) Posted on: Feb 17, 2024 8:26 AM
Message:

In my locale, The dominant property management company has not collected security deposits for more than a decade. First month rent is double the normal rate. Also, $75. Application fee. --149.76.xxx.x




Not collecting deposits (by Still Learning [NH]) Posted on: Feb 17, 2024 8:31 AM
Message:

I am still a fan of security deposits vs collecting after they move. Most of my tenants get all or the majority of their deposit back. My son was the opposite of yours Brad. He was in there scrubbing when his roommates didn’t show up since it was their parents money vs his money. --184.167.xxx.xx




Not collecting deposits (by S i d [MO]) Posted on: Feb 17, 2024 11:34 AM
Message:

"We charge a Non-Refundable Rent Lock Fee equal to one month's rent. This fee gets them a year lease and we lock in the rent, no increases for 12 full months. No fee, no lease."

Got a few questions for how this works.

No lease... are you month to month, but just agree not to raise the rent for 12 months?

Once the first 12 months are over, do you collect another rent lock fee, or just go straight month to month?

I like the idea overall. Would take some work to implement this when folks in my area are used to rent and deposit, but I'm listening.... would definitely like getting that extra up front and not having to mess with security deposits.

--184.4.xx.xxx




Not collecting deposits (by Oregon Woodsmoke [ID]) Posted on: Feb 17, 2024 11:49 AM
Message:

I'm surprised that you get your units back clean. My deposits are pretty hefty and the tenants want them back so they put a lot of effort into handing me back a sparkling clean house, damage-free.

My tenant do expect to get their deposits back and I suspect they would be willing to go to war in order to get their deposits back. Rentals are pretty thin on the ground but I doubt that my tenants would rent a place that had a huge non-refundable fee instead of a refundable deposit.

The only way I can see that working is if every other landlord went to that system and that was the only way to get a rental, in which case, I'd still be taking a refundable deposit to encourage good care of the house.

--76.178.xxx.xxx




Not collecting deposits (by BRAD 20,000 [IN]) Posted on: Feb 17, 2024 1:44 PM
Message:

It's all about human nature. Well screened, In Home Visited people who pay rent on time will clean when WE LLs effectively communicate our expectations for their exit.

Statistically we saw no difference between deposit or no deposit when we started the change. The good news was I had collected money up front "like" a security deposit in my bank.

Then by improving my lease, orienting the resident, and improving move out procedures we get clean turnovers. RARE to have a bad turnover. A deposit would not have motivated the bad move out res.

Back when I took the traditional security deposit of one month's rent I did a five year study. Of the 200+ move outs over 5 years we only returned 3 deposits, even after all the chiding of "We want to help you get your deposit back".

We used every penny of the other 197 deposits to pay for cleaning and repairs and were suing people in court for thousands more above the deposit amount.

I cringe when I look back at all the time we lost cleaning up after people and the thousands lost trying to collect on those court judgments.

197 dirty turnovers. The whole thing was very discouraging, esp for Wifey. "We had that house looking so cute!"

BRAD --73.103.xxx.xxx




Not collecting deposits (by Renne [TX]) Posted on: Feb 17, 2024 5:47 PM
Message:

Brad, I am sick of deposits.

Rather, I'm sick of the mentality of "just take it out of the deposit" as it has cost us quite a bit of money even with regular inspections.

We too have spent every deposit penny plus more trying to get homes back to square one and then at least 1 month before it's ready to show.

I would like to hear more about the nuts and bolts of how to implement your no deposit.

Can you please share more?

I'm also going to search WMH's posts about how she gets her tenants to leave homes spick and span for the incoming tenant.

I am ready for a change and more FREEDOM!

Thank you!

Renne --12.196.xxx.xxx




Not collecting deposits (by zero [IN]) Posted on: Feb 17, 2024 6:48 PM
Message:

Another round table discussion at the next con?

Love the idea, not sure on the implementation.

Hoping when I meet WMH either at the con or the boot camp that I can brain pick her procedure as well. --107.147.xx.xx




Not collecting deposits (by Jason [VA]) Posted on: Feb 17, 2024 7:04 PM
Message:

“Of the 200+ move outs over 5 years we only returned 3 deposits”

I’d be willing to bet WMH would be the polar opposite of that statistic. That sounds like something is slipping though the cracks on the managerial side. --71.63.xx.xx




Not collecting deposits (by 6x6 [TN]) Posted on: Feb 17, 2024 7:51 PM
Message:

I am surprised that your son thought that was as I am sure that you trained him in LLing. Why would your son think that? --73.190.xxx.xxx




Not collecting deposits (by 6x6 [TN]) Posted on: Feb 17, 2024 7:52 PM
Message:

Sid, I took it that Brad meant if they didn't pay the fee than they don't get to lease signing. --73.190.xxx.xxx




Not collecting deposits (by BRAD 20,000 [IN]) Posted on: Feb 17, 2024 10:41 PM
Message:

Jason,

The bad move outs were back when I did old school traditional LLing deposits. I assumed like most, that trashout, scrubbing, cleaning, and repainting was the cost of doing business and to be covered by the deposit. But it wasn't enough money.

That statistic and learning from WMH here opened my eyes. Daughter20,000's apt was PERFECT when I helped her move. A few move outs were PERFECT. Angels sang when I realized IT IS POSSIBLE!

I updated my lease and procedures. Night and day difference for the better.

Deposit or no deposit it's human nature - did we pick the more responsible people? and did we set and train our expectations at move out?

Son's filthy bathroom (shared with 3 guys) -I reminded him it's his money and it was a fantastic life lesson for him. He is now a clean freak.

BRAD --73.103.xxx.xxx




Not collecting deposits (by BRAD 20,000 [IN]) Posted on: Feb 17, 2024 10:48 PM
Message:

Renne,

Just wait until the judge agrees with the tenant that you overcharged him a dollar, so legally you lost the case and have to return TRIPLE the deposit and pay the T's atty.

BRAD --73.103.xxx.xxx




Not collecting deposits (by Ken [NY]) Posted on: Feb 18, 2024 7:55 AM
Message:

Brad- arent your deals all rent to own now? assuming that is the case of course you dont collect a security deposit.I will assume when most people leave they owe 1-3 months back payments and leave under threat of eviction.In my state if i do a rent to own once i collect the first payment at least one local city court says go do a foreclosure so i dont do them anymore --73.177.xxx.xx




Not collecting deposits (by Jeffrey [VA]) Posted on: Feb 18, 2024 10:04 AM
Message:

Just one more thought to throw into the mix:)

It does not have to be all or nothing. There is a third option. The amount you normally collect for security deposit can be SPLIT. I have been doing (and teaching landlords to consider doing) a version of this third option for many years.

For example, 10% 25% or half of the normal deposit amount that you would collect, can instead be categorized as a administrative or leasing fee. And the other half would remain as your traditional security deposit.

Thus: Instead of collecting $1,000 security deposit, you collect $250 non-refundable leasing fee and $750 refundable security deposit. Please note that the leasing fee and deposit amounts are clearly disclosed in the lease. --172.56.xxx.xxx




Not collecting deposits (by Sisco [MO]) Posted on: Feb 18, 2024 2:09 PM
Message:

Brad wrote - But it wasn't enough money.

This has been my experience on a bad move out or anything less than a good move out.

I know Sid has offloaded appliances and generally has fewer items of his for the tenant to care for.

Avoidance of the filthy, and the house beaters are the most important consideration in my screening. I can deal with non payment cheaper. --149.76.xxx.x




Not collecting deposits (by 6x6 [TN]) Posted on: Feb 18, 2024 4:38 PM
Message:

Thank you, Brad & Jeffrey. --73.190.xxx.xxx




Not collecting deposits (by zero [IN]) Posted on: Feb 18, 2024 6:44 PM
Message:

Jeffrey I like that.

You get some up front funds but the tenant still has a little burn if they do not play by the rules. --107.147.xx.xx




Not collecting deposits (by WMH [NC]) Posted on: Feb 18, 2024 10:34 PM
Message:

I tend to believe most people are highly motivated by money and rewards. --173.28.xx.xxx




Not collecting deposits (by Ray-N-Pa [PA]) Posted on: Feb 19, 2024 3:46 PM
Message:

Does not charging a deposit, sorta funnel the folks who the most cash strapped towards you? --24.101.xxx.xxx



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