Rental Property Investor · Derry, NH · Member since 2016 · 2 posts · 0 votes
Hello All,
I am currently in the process of renting out my unit in Derry, New Hampshire for the first time and noticed in The Book on Managing Rental Properties that it recommends taking a deposit to hold the unit after accepting a new tenant. Because this deposit typically transfers over to the new tenant's security deposit, should I be charging an amount equal to the security deposit or only a fraction of that amount? What is common practice? Thanks!
Rental Property Investor · NH · Member since 2018 · 50 posts · 28 votes
8y
Hey Cameron
I’m in Derry also. I collect the security deposit in full within 48 hours of offering the property. Then first month when giving keys. I do certified funds for both, then payments online after that. When you say hold the property, hopefully it’s just short term. I wouldn’t hold for more than a week or two if your place is move in ready.
Rental Property Investor · NH · Member since 2018 · 50 posts · 28 votes
8y
Hey Cameron
I’m in Derry also. I collect the security deposit in full within 48 hours of offering the property. Then first month when giving keys. I do certified funds for both, then payments online after that. When you say hold the property, hopefully it’s just short term. I wouldn’t hold for more than a week or two if your place is move in ready.
Investor · Londonderry, NH · Member since 2016 · 16 posts · 8 votes
8y
I agree, once we select a tenant I write the lease and have them sign it right away. Then I collect the full security deposit at the lease signing. I have had some tenants struggle with the full security deposit if they are moving from one rental to another and they have a security deposit with someone else. I have accepted as little as half upfront and the other half at the move in if I am very comfortable with them.
Investor · Campton, NH · Member since 2010 · 285 posts · 143 votes
8y
I'd be inclined to ask for half up front, if you feel it necessary to do the 'hold' thing, however typically best to get the whole deposit upfront anyways and always best to make the security deposit a different number than the rent so there's no confusion between the two....... good luck!
I would take the equilivant of first months rent as a non refundable deposit. This is your protection to insure you do not lose a month having to find a new tenant when they bail at the last minute.
This is also a good screening tool. If they can not afford the equilivant of a months rent deposit they definatly can not afford the apartment due to very poor financial planning. If they balk at the amount reject their application.
In reality you should not be taking deposits to hold. When they agree to rent, you have them sign the lease and provide all money up front. First month, deposit, last month….whatever your lease requires.