Is it OK if parents pay Semi-Annual for College Students' Rent?

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I would allow them to pay this way, but would not offer the discount. I have run across this before and feel that I would have to keep the funds separate, or at least not spend them until they would have been normally collected, so collecting the money ahead of time really gives you no advantage other than knowing that the rent won't be late, but choosing a good tenant would also mean you would get your rent on time, so therefore no discount.It is smart to schedule it the way you have so as not to impact your taxes. I do think it would be harder to evict someone who has paid up front, but generally it is harder to evict someone for an issue other than nonpayment of rent anyhow.We purchased a triplex where one of the tenants had made such an arrangement, and it turned out great for us since the seller had to hand over 8 months of rent at closing. They seemed a bit put out by that, but it was rent paid for a time when they would no longer own the property so they had to pay up. I thought the practice was illegal, but from what I can tell it is just that it would be illegal to demand the entire year's rent up front, but ok if they offer it.So far, in my limited experience, it has been the parents of college kids who offer this, and occasionally someone with less than stellar rental history who wants to dangle the carrot of a whole year's rent in front of me to entice me to look past their past.Kelly

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Sue K.Your unanimous positions about the lack of reward for taking in advance rent and discounting rent, especially in a small margins business, has taught me a valuable lesson. Thank you all for helping me through this. I've learned something.

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@Jon S. Unless you have a signed lease you have not agreed to the discount. $100 a month is a big giveaway in a low margin business like landlording. Time to have a change of heart - say you have consulted your CPA or some other expert and they have advised you that you cannot give a discount for up front payment. Emphasise the underlying value of the unit. They are probably used to an environment more predicated on negotiations and may well have been surprised that you gave in on this. Unless this unit is hard to rent, you have had minimal traffic, etc. I would be loath to give up $100 a month for an unorthodox payment plan.

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Makes perfect sense to me. It's hard for nice people to think in terms of "what's in it for me?" lol. But, it's okay to do that when you're a landlord and considering what a tenant wants. Any deal should be fair for both sides, both sides should get something out of the agreement.I think the clause you wrote does give you something in return, though. They don't get it, unless they completely fulfill the terms of the agreement without problems. So, you gave up a little, but it should also have bought you some peace of mind. And, if they don't live up to their end of the agreement - you haven't lost anything. It was a brilliant solution, in my opinion :-)

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I agree with Stephen E that you could sure back out of the agreement. I get the sense you will go forward, though, since you did agree. That said, I think your wording is perfect. This way, just in case they thought they could pay less rent, then break the contract - surprise! Watch them back out now LOL!

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Hi Jon, I rented quite a few units to international students. I never had trouble with them. I also, only ever rented to anyone - with month to month agreements. With no discounts.You don't have to give them any discounts. There is usually nothing in it for the landlord to offer a discount, so I'd just say no to that. Many cultures are used to negotiating everything. It's how they do things, so they will ask. But, I'd say no. Think about it. Do you have to rent for less, to get the unit rented? Probably not.And, regarding your question about if the proposed contract is legit - the only law I know of regarding rental agreements, is that any rental agreement that is for 12 months or longer, must be in writing. So, you can pretty much write your contract however you like, as long as it's not illegal. And by that, I mean it's not discriminatory, etc.I don't know what country the students would be from. I can tell you that I never had any problems with tenants from any Asian country. I can tell you that I did have problems with students from India - and only because they would move and replace themselves without ever telling me. I'd end up with an apartment full of tenants - none of whom were on the original lease.None of them created problems, and the rent was always paid. However, we did end up with bedbugs. This can happen if you have tenants who move in from other countries with bedbug issues, or who have been doing a lot of traveling.To be honest, but perhaps politically incorrect - the only times we had problems with bedbugs was when we rented to Indians who had friends and relatives visiting from India. This is just my personal experience.Still, I think you'd be wise to just rent month to month. If they want to pay up front, I'd just write up something that says that even though you are accepting x amount of money, that you reserve the right to reimburse any extra money you have collected, if you terminate the agreement.

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@Kelly N.Kelly is correct that even if they pay 6 months in advance the money is not yours legally until each monthly payment comes due. In the event they break their lease or you evict you must give back any overpayment you are holding in trust.There is zero advantage to a landlord to accept large advance payments and absolutely no reason to negotiate or give discounts on rents.

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@Jon S.- I like the wording you chose, great job! It protects your interests - getting the payments when they said they would pay, but not so soon as to impact your taxes for this year, and keeping them responsible for being good tenants by dangling the discount carrot in front of them.

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Sue K. I think you are both correct, discounting was not necessary, but I already agreed to the discount proposed. Now I am working on the wording of the clause, and am finding the idea of giving the discount at the end of the lease, as a $1200 credit towards the final month of rent, after meeting the advance payment schedule, and meeting all other financial obligations of the lease, and meeting all other obligations of the lease, as an easier way to do this. This protects me from crediting the discount in advance, and then finding out I have a difficult tenant. I'm still working on the wording, but the proposed discount clause might go something like this: "If all rents for the period of July 1st 2016 through December 31st 2016 are paid on or before July 1st 2016, and all rents for the period of January 1st 2017 through June 30th 2017 are paid on or before January 5th 2017 but not before January 1st 2017, and tenant remits payment in a timely manner for all other financial obligations set forth by the lease, and tenant abides by all terms of the lease or upon notification of any lease violation tenant promptly cures all lease violations for which they are notified within the specified time limit set by the notice, the final month rent shall be discounted $1200.00." Thoughts? Suggestions? Thank you

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This got very complicated. It has been so much work to write a clause for this, its more work for less money. So that said, I won't be doing it again. I know I could back out now before signing the lease, but I thought it through, I may have been $50 over market in my asking price, so I am really probably giving up $50, and if I start looking for a tenant now, I will surely lose another month of rent, which is $1600 (orginally it was $1700), so I'd rather consider this a lesson learned, not do it again, but keep the tenant who I have already screened. I hope that makes sense?