Prospective Tenant Want Me To Hold Property 1 Month Before Move-In

[Rebecca Mickler]

Hello all,

I'm relatively new to REI and getting ready to re-lease my first rental property after a 3 year tenant. My management company sent me an email stating they had a "very qualified applicant" for my property. The prospective tenant, however, doesn't want the lease to start until May 8th. There have been several other inquiries on the property. The management company said they typically require a $250 hold fee to hold the property, but as long as the tenants signs the lease/moves in, the $250 is credited towards the first month's rent (it defaults to me if they bail, but the mortgage is $830). That leaves me footing the mortgage for a month when I could only pay 1-2 weeks if a different tenant were approved. Is that standard practice? My instinct tells me to require a non-refundable 1/2 month to hold it but I don't want to scare the "very qualified" tenant away. It doesn't seem advantageous to me from a business sense to eat a month's mortgage if I don't have to. What would you do? TIA for any advice! RebeccaM

[Phillip Syrios]

We usually have a policy letting people hold the property for 2 weeks with a full deposit paid. That deposit is not refundable after 3 days and only about 75% is refundable after they put money down period. We sign agreement with them stating this so they know the money is not refundable if they back out. We also do not stop renting the property until we have this agreement signed and money in hand. We will continue taking applications even if they are scheduled to come in and bring the deposit because we never know if they will.

If they want to hold the unit longer than that and not move in we are fine with that but the lease must start 2 weeks after they put down the deposit meaning they must start paying rent.

We could not hold properties at all but moving is a difficult thing for our prospects and we feel giving people 2 weeks is enough to make them feel comfortable about applying rather than being worried someone is going to snatch the property from them before they are ready to sign the lease.

I realize you are working with a PM company but hopefully what we do can give you some guidance on your situation.