How many of you are still doing First/Last/Deposit?

Question

I'm curious how many other LLs still do first/last/deposit? We have always done it that way but I have had some anecdotal information from potential tenants the last few rentals that more places are only starting to ask for first and deposit. I live in a LL friendly state (Tennessee) but it still seems to me short-sighted not to collect last month's rent, as you then depend on the deposit for a non-payer while you evict them, and then hope there's no damage.

What's your practice, and do you see any changes in this in your local market?

Also, on the same subject: how many of you let the "last month" be the last month and then just go month to month with nothing but the deposit on record? For example: on a one-year lease, the last month is month 12. If the tenant is going month to month after that (you're not having them sign a new lease), do you have them remit a new "last month", push the previous last month into infinity (i.e. until they say they're moving), or just hope that because they've been a good tenant for the previous 11 months it's not an issue?

Kimberley R. · Answer

I'm in Chicago also, and strictly avoid any mention of a "security deposit" for the reasons cited by @Ray Harrell. We charge first months rent, a non refundable move in fee that is less then 50% of the rent to prevent a tenant claiming "they called it a fee but it was actually a deposit," and any additional non refundable fees (e.g. pet fees) that apply.

Ray Harrell · Answer

In Chicago very few landlords do security. Instead they charge a move-in fee. Reason being the laws and rules around security deposits are so strict, historically landlords ended up paying damages, so most opt for a move-in fee. Better areas that require a higher credit score will only charge first month's rent.

John Underwood · Answer

@JD Martin @Scott Rogers hit the nail on the head. I try and feel it out and do what the market will bear. I would love to get last months rent and I start with that. If I have a qualified tenant I am happy to get a larger deposit that one months rent if that is the best I feel I can do.

If they have a pretty good background check I may just do a deposit equal to one months rent so that I can sign a lease and turn off all my ads so that people quit calling me.

So with all things Real Estate...it depends.

Michelle Clay · Answer

I live in East TN and I get first and last month up front and a deposit if they have a pet.

Craig Curelop · Answer

@JD Martin - I think it all depends on where you live and who your tenants are. For example, with college students, I would do first, last, and deposit.

In almost any other situation, I would say that first and security deposit is fine. I usually make it such that when showing my place, the security deposit secures your spot (i.e. takes it off the market) and first month's rent is due on the day they move in.

Chris T. · Answer

I charge 1.5 months deposit + first month rent. Even with that, some candidates (assuming they pass all the other requirements) don't seem to have the cash.

Recently on my lease, I've added once the lease ends, and it becomes a month to month lease, the rent will be $X per week. And that weekly rent is more than the regular rent. So that if a tenant needs more time to move out, there are no negotiations or questions asked how much I will charge them.

Scott Rogers · Answer

I wish I could get "last" but we would remain vacant. Customary in west Georgia is First and Deposit

How many of you are still doing First/Last/Deposit?

How many of you are still doing First/Last/Deposit?

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