Do you discount if tenant offers to pay rent in advance?

[Joe M.]

I had an applicant for one of my vacant properties ask me what sort of discount I could offer if he paid a full years worth of rent in advance.

I told him I had never been asked that before so I wasn't sure.

The rent on this particular house is $650/mo for an annual total of $7800. I was thinking maybe give him a $300 discount if he paid a full year in advance and make it $7500.

The thing I'm concerned about is what happens if he does something stupid and violates the lease in some way. Does he then forfeit all rents paid or would I be required to refund it?

[Account Closed]

Having the money today vs having over the course of the year has some value. For tax purposes any advance rent payment is income in the year received.

You also may be liable for returning some of this payment if for some reason they move out before the end of the lease.

I might offer a $100 discount, but I doubt that I would offer more. You will also want to stipulate how any discount is to be applied over the year. Otherwise if for some reason they move early you may have a dispute as to how much to pay them.