Importance of a paid in advance Security Deposit

[Cal C.]

I use the security deposit (and the first month's rent) as a test case to see if the potential tenant will be able to pay rent on time. If they can't come up with a security deposit and 1st Month's rent prior to when they want the lease to start that is a huge indicator that they will not be able to make timely rent payments for the following months.

I have worked with a few tenants over the years who were having problems coming up with enough money for both 1st month's rent and the security deposit and invariably within a few months the tenants would have problems paying the rent on time. I know some of you are quite happy to legitimately make the extra money, but to me it is not worth the hassle and frustration.

The temptation is often there to work with someone, but if you do all you are accomplishing is taking on a problem tenant.

[Cal C.]

Originally posted by @Kris Taylor:

Curious if anyone has done an income verification, and yet still had a tenant who couldn't produce 1st month's rent and security? So, in other words you confirm they make enough and have good credit, but they still have no cash on hand or savings. How many consider this a red flag, or is proof of income enough?

I have this problem come up about 1/3 to 1/2 the time. It is to be expected since a large number of Americans, no matter what the salary level, live paycheck to paycheck.