All Forum Posts by: David S.

@Joe Splitrock It's strictly a hypothetical for future purposes. I was hoping this might be a somewhat normal practice outside of my knowledge, but apparently not at all and I can see why. I'll probably do as @Patrick M. does and ask for 1.5 months deposit; that seems a reasonable middle ground without scaring most prospective tenants away. 

@Peter M. My thought/worry exactly and I'm actually quite curious what the industry averages are on the practice of keeping security deposits in situations where they shouldn't be. My current tenant ran into exactly that with her last rental where the management company effectively by default charged the entire deposit... she had to fight to get it back. I suspect they see what they can get away with and only bother paying it back if the tenant puts up a fight. It's not right, but for the money it's an easy paycheck for them, so I have to assume it's very common. 

Per @Mike Dymski 

"Being handy is a learned skill and you can cut your teeth on your first few deals. You don't need to swing the hammer but learning how to price repairs and find and vet contractors is important." 

Though you should learn some basics so you're also not wasting money clearing a drain. 

And thus one of the major reasons to leave the parent's place. Get out, house hack, or at least leave the nest and get a roommate. It's not just learning all the details of being on your own, but it's the psychological aspect of stepping out and starting on your own rather than coming home to mom and dad. Frankly it also looks a lot better when you sit down for a loan some day if you're not still living at home but rather lived in your own place for a while, especially if you can show them that you're willing and able to hustle and manage your costs properly by house hacking or having a roommate when you don't need one. 

I’m not sure if I’m not explaining this correctly, but the intention being EXTRA security deposit. So opposed to just having the one month deposit, this is a way getting a second month in a market place where most are taking just one month. A lot of prospective tanants are either unwilling or unable to fork over four months worth of money up front and when other LL’s are asking three, it tends to cut down your list of prospective tenants. 

@Levi T. The intention is to maximize the deposit where asking for first, last, and two months security up front is just too much for most folks, but where they might have no objection to paying one month security (say $900) while spending an extra $75 per month to build that up to $1800 by the time a year passes. $900 doesnt fix all that much if you have a bad apple. The extra 900 bucks makes a big difference in the renter’s psychology as well as covering potential damage while the $75 a month is often not a deal breaker, especially if they intend to recoup it.  If they move on and need funds, now they have a potential $1800 coming their way. 

@Travis Rasmussen I'm not big on the concept of STR now, but you could likely convince me otherwise, especially since we're both in pricey markets. I'll be in touch, and I responded to your message btw. #intrigued

I'm with @Zach Simpson; You make great money but don't A. Assume you always will, and B. Live according to your income when you know there's better ways to be spending that money, or rather, investing it. You obviously need no help learning, so start there. Do the house hack, not because you need to but because it's the smart thing to do and because you're likely shy on good credit at your age and possibly tenure at your job/business as well. 

I'd probably pass on the real estate route if you already like what you do and you already do that well. Focus on the leverage aspect instead... if you're making that money you're smart enough to figure out why I say that ;) 

This is just a theoretical that popped into my head, but for those markets where rents are relatively low, would it be reasonable to take on a tenant with the typical one month's security deposit, but in addition you add $50 or $100/month to the rent to build up the deposit till it hits two month's worth? This would still be fully refundable to the tenant and is a nice way to save up for their next place, be it another rental or a purchase while giving the LL more security.

I ask because I get the impression that tenants often find a sense of comfort with their LL's over time and are more likely to get lacks in their upkeep of a property over time. Sometimes they add a pet under the radar, etc. Damage and poor upkeep especially seem to occur during the chaos of moving out. 

In addition, the cost to repair any given damage done to a property is relatively uniform over different markets (especially if you do the repairs yourself). Sure contractors cost more in higher end markets, but the materials are roughly the same in price, while the deposit can differ significantly. 

Does anybody do this or has anybody every tried it? What pro/cons do you see in applying this concept? 

I like what @Julie Marquez does, but wonder if it's possible/reasonable to adapt such a turnaround fee in a seasonal manner, where you'd refund the fee for a tenant if they moved during X months, and charged it if they move in say Nov, Dec, Jan, Feb, or March. 

Of course you'd market it as a "permanent fee" where you're willing to omit it out of the kindness of your heart if they happen to move during a warmer month. This model is adaptable to both MTM and long term leases. 

@Wendy Schultz With regards the travel trailer, I strongly recommend a tracking device just in case. I used to rent a flat bed utility trailer, had a guy rent it and bend the frame because he overloaded it. He flat out denied it, but because I had the tracker I was able to get enough evidence to corner him and he eventually had to buy the trailer from me. Specify the value of the trailer in the contract too! Cost was $80 up front, $20 a month for service. Well worth it and easy to use.