Collecting a years rent in advance

[Loren Becker]

Hello,

I know this is probably a good problem to have, but we have a vacancy in a high end property in Hermosa Beach.  The rents is $8700 per month, our recent prospect tenant is asking to pay a full 12 months up front.  

We would be receiving a check over $100k along with the deposit.  Great news!

My question is the tax implications.  that extra revenue in 2016 would impact us in our taxes 

any suggestions?

Thank you,

[Thomas S.]

Not a good problem, forget the tax implications, what is wrong with this applicant.

I nearly lost an eye when the red flags popped up on your post.

They usually say it is more convent for them or they have the money and want you to feel secure in renting etc. but then there is always a catch. They give you the check last minute and surprise it bounces, you never see another dollar and eviction is necessary. Or they move in and do unthinkable things to the property, guess what they have paid for a year and you are stuck. Getting them out and undoing the damage bankrupts you.

I have always said no thanks, I'll just collect it monthly and guess what they all decided not to rent.

Tell him no thanks, not necessary I prefer to collect monthly.

Thankfully dodged another bullet.