Higher security deposit for more tenants

[Angelo R.]

Standard practice seems to be a fixed deposit amount per unit, regardless of the number of tenants. While there are other factors and exceptions, more people generally can cause more damage than fewer people. 

I always see landlords asking for additional “pet deposits,” operating under the notion that pets are potentially more destructive than people  

Applying that logic to a $1000/month rental unit that can accommodate 4 people, would it make sense to set the security deposit to $1000 for 1-2 people, and $2000 for 3-4 people?

[Kyle J.]

I don’t necessarily agree that more people cause more damage. More wear and tear maybe on things like carpet, but you can’t make security deposit deductions for wear and tear so I’m not sure a larger deposit for more people would be that beneficial. 

The bigger argument against doing what you’re suggesting though, in my opinion, would be that you could run the risk of violating Fair Housing laws. 

Suppose you had two single guys apply to rent your $1000 property. In your example, they’d have to pay $1000 deposit. However, if a married couple with 2 kids applied to rent the same property, they’d have to pay a deposit double that amount because they have 4 people. That would likely be considered discrimination based on familial status.