No security deposit.

[Ruel K.]

I am renting out my unfurnished 2BR / 2 BA townhouse for $2k/month. Security deposit is $3,500 + first and last month's rent are the move-in costs, bringing it to $7,500. Right now I got 2 prospective tenants, both women. One has bad credit, 9 months at her job and gets paid $7,400/month. She is a regional manager and travels a lot. She has good referral letter from her current apartment manager. The other lady is her long-time friend and roommate. She has been 6 years at her job and says is never home. Due to one of  them having bad credit/low credit score, I would double the security deposit. They can only afford the first and last month's rent of $4k. They seem to be nice and really decent people and have promised to take good care of my property. What do you guys think of no security deposit? Kinda risky right? Should they at least make the minimum deposit of $3.500?

[Jeff B.]

Originally posted by @Ruel K.:

I am renting out my unfurnished 2BR / 2 BA townhouse for $2k/month. Security deposit is $3,500 + first and last month's rent are the move-in costs, bringing it to $7,500.

 In Calif, we are allowed

• first + last
• OR
• first + deposit and the deposit must not exceed 2x the rent

However, I've always insisted on the rent + the security and move-in when I hand over the keys - - insufficient funds voids the signature and the unit goes back on the market.

Never take partial payments and don't prorate time payments on the deposit.

[Andrew Syrios]

It sounds like the one with good credit would qualify on her own. I would probably rent to her with the first month's rent and deposit. But I'm in KC and I know California is a much tighter market, so maybe it's worth waiting a bit.

[Lois Ginter]

I think your security deposit and move in cost is very high, unless this is common for your area.  

I don't think it is fair to charge somebody more because they have a credit issue. If anything it makes it harder for them to improve their credit because they don't have money to pay down debt.  The credit issue could be due to divorce, medical bills, etc, 

If you think they will be good tenants, why not just collect the first month rent and security deposit?  Put them on a month to month lease if something comes up and they can't pay. 

[Ruel K.]

@Jeff - Yes in CA, for unfurnished rental units, the deposit cant' more than twice the rent. I think the first month's + security deposit is reasonable.

@Andrew - the one with good credit has a low income though. I follow the criteria that one's income should be at least 2.5x or 3x the rent. That is why they are roommates, helping out each other for rent.

@Lois-I know someone in my area who rents out a house  and has the same move-in costs. It's quite common in my area.

Thanks for the feedback. Since I have this good "vibe" with these prospective tenants, I might just do the minimum security deposit and first month's rent.