Deposits on a luxury condo

[Cory Melious]

Hey all;

I wanted to float the question of deposits, and “What are they good for?” I’m thinking about renting my luxury condo out for $3500. I am going to require a renters insurance policy that I am a listed interest on. In my market, I am competing with a couple brand new buildings that are offering $0 fee’s (they have a leasing office, so no realtor fee’s).  They are also offering other incentives like a free month. Granted, this incentive is just to fill the building...it is something that I need to compete with right now. These two incentives combined can add up to $7000+ in move in costs alone never mind first and last months rent.

So....considering that most people who can afford $3,000+ dollar apartments usually have good steady jobs, and are not the types of people who let their dogs crap all over their place, eat the woodwork, or otherwise destroy their home, I’m wondering what benefit I really get from having a deposit on hand. If there is damage, theoretically, I could have the insurance pay for the damages. Most deposits are not allowed to be used for a months rent anyways, and I have to place it in a bank with interest. So really what good is it? To me, not charging a deposit at such a high price can really benefit/reduce the move in price of a new tenant. Consider these other two thoughts as well. If I give a free month as incentive I am guaranteed the lose of $3500, if I take the gamble and not collect the deposit, I’m hedging my bet that the tenant wont trash the place, and therefore less likely to lose $3500 bucks

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I’d love to hear your thoughts on this NYC!