How much security deposit?

[Derik Hammer]

What factors do you consider when deciding between requiring a new tenant provide "First | Last | 1 month Security" vs. "First | 1 month Security"?

[Kevin Sobilo]

@Derik Hammer, first consider your state's laws.

In my state asking for last months rent is treated the same as asking for an additional month of security deposit. They must be returned to the tenant at the end of the first 12 months of tenancy. So, that would weigh into the calculation. 

I would say, that the class of the unit and tenant profile would determine the approach to this additional security by collecting more money. If you have C/D units with a rougher tenant profile on average the additional security could be worthwhile.

On the other side if you have B/C class units with a better tenant profile requiring the additional money could make better tenants shy away from applying. In my definition of a "good tenant", they are people who work hard to have choices in life. So, they can choose another place over yours because they are likely to be accepted anywhere they apply.