Paying for 2 years upfront?

[Charlie Moore]

Tenant wants to pay next two years upfront! 

What would you say to this?

If i say yes, How do I even go about proper deductions for tax purposes?

The total would be 24,000 on the dot. Paid to me

[Nathan Gesner]

@Charlie Moore let me rain on your parade.

No intelligent person gives up two years of rent when they could be using those funds to invest or even collect interest in a bank account. When someone offers to pay in advance, it's a big red flag that you shouldn't ignore.

Many tenants will offer to pay in advance or lease for a long period because they want you to get excited about the easy money and ignoring something negative (or maybe not screen them at all). I've screened thousands of applications over the years and in almost every case, they are hiding something. It's like a woman with push-up bras or guys with big trucks that hide their personality flaws.

The other issue is that you can't legally consider that money yours until it's earned. If the tenant pays two years in advance and then breaks the lease four months later, you are obligated to find a replacement tenant and then return any unused portion of the rent. You better hold on to it until it's earned.

Personally, I just screen them like everyone else. If they are approved, they can pay rent like everyone else. I always accept money in advance but I never make special concessions for advanced payments. I also don't rent to people for more than one year because - in my experience - they tend to break the lease early about 90% of the time.