Skip to content
×
PRO
Pro Members Get Full Access!
Get off the sidelines and take action in real estate investing with BiggerPockets Pro. Our comprehensive suite of tools and resources minimize mistakes, support informed decisions, and propel you to success.
Advanced networking features
Market and Deal Finder tools
Property analysis calculators
Landlord Command Center
$0
TODAY
$69.00/month when billed monthly.
$32.50/month when billed annually.
7 day free trial. Cancel anytime
Already a Pro Member? Sign in here

Join Over 3 Million Real Estate Investors

Create a free BiggerPockets account to comment, participate, and connect with over 3 million real estate investors.
Use your real name
By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.
The community here is like my own little personal real estate army that I can depend upon to help me through ANY problems I come across.
General Landlording & Rental Properties
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

Updated about 4 hours ago, 12/24/2024

User Stats

210
Posts
181
Votes
Phillip Austin
Pro Member
  • Property Manager
  • Denver, CO
181
Votes |
210
Posts

TREND - PM companies offering financial assistance for security deposit down payments

Phillip Austin
Pro Member
  • Property Manager
  • Denver, CO
Posted

As a professional property manager, I'm coming across an interesting trend related to institutions providing financial assistance for tenants who have trouble paying their security deposit and I would love to hear feedback from the BP community.

Large PM companies have begun partnering with financial institutions, such as Rhino Insurance, to help tenants who struggle with paying their security deposit. Here's how it works:

If their deposit is $1,500, they can either choose to pay the SD in full or elect to take out what is essentially a loan with Rhino Insurance and only pay $25 per month ($20 goes to Rhino and the remaining $5 goes to the PM company) toward their $1,500 SD. If the tenant becomes delinquent and stops paying rent, Rhino will insure their full $1,500 SD plus an additional nominal amount to offset the losses incurred by the landlord. For a $1,500 SD, they would most likely ensure an amount close to $2,700.

From my perspective, we should never move in a tenant who cannot afford their security deposit. We should also never have a revenue stream and make money off a tenant's security deposit. Lastly, if the tenant does become delinquent and we have to file a claim with Rhino Insurance to collect their deposit, we're adding to the financial woes of that tenant and putting them into an even worse financial position when they wouldn't have qualified in the first place.

Thoughts? Is this is a positive trend? Do you have any personal experience with these types of programs? Is this a predatory practice by PMs? Should we be allowed to make money off a tenant's SD?

  • Phillip Austin
  • Loading replies...