She had a choice of putting down a deposit equal to two month's rent or paying monthly "deposit insurance." 

I see it has an area for fees in lieu and an area for security deposits.

The mortgage market is healthy so there are several ways for income to be calculated including but not limited too: full income verification of two years W-2's or tax returns, 1-2 years of a 1099, average deposits of 12-24 months of personal or (50%) of business bank statements, an up to date P&L, DSCR (debt service coverage ratio) or rental income (investment properties only). - Appraisal.

If you're worried about damage, I think some form of security deposit for longer stays makes sense.

. - Higher and Hard Deposits.

I have my tenants deposit everything into my predesignated back account. 

If you are paying in cash, you'd have the bank write a letter indicating you have the capital on deposit or you can also print out your bank statement showing the funds.

Regarding if you should DIY manage or hire a PMC:Many new investors read a couple of posts and then think self-managing their rental property, and avoiding PMC charges, is an easy way to boost their ROI.The reality, is that many of these investors really haven’t taken the time to properly understand what it takes to properly manage a rental property and the corresponding tenants.Here’s a list of some of the requirements to properly manage a rental property:Knowledge of all local municipality, state and federal landlord requirementsIntimate knowledge of all Fair Housing statutesUnderstand all federal privacy laws, as they’ll be handling social security numbers and IDsProper business insurance in the event their computer is hacked and or they improperly dispose of tenant data.Where to advertise their rental, other than ZillowWriting ads compliant with Fair Housing statutesCreating a process to accept calls/texts and schedule prospects to show their rentalA rental application and application fees that meet all local and state requirementsKnowing how to screen applicants to avoid professional tenants and the growing amount of fraudulent dataA lease compliant with all local, state & federal lawsUnderstanding local and state requirements regarding security deposit collection and holdingRent acceptance options for tenants and accounting system to track, including late fees, etc.Plans to handle nonpayment of rent issuesKnowledge of their local eviction laws or access to an attorney familiar with evictionsHow to accept, track and respond to tenant maintenance issuesBuilding a list of handymen and contractors for maintenance and turns between tenantsExpertise at evaluating tenant damages to charge against security deposit when tenants move outResearching local utility requirements to avoid suspension of services that could lead to frozen pipes or flooded basements, etc.

They never turn down a job, they go collecting deposit after deposit showing up to do a little at a time and on to the next project.

Good Evening,I have a question, so I bought a rental property with tenants in place, The previous landlord didn't require them to have a security deposit, How would I go by with telling them that I required a security deposit, also they pay at the end of the month for the month they been on, I would like to have them pay rent the month before. so for example have them pay the rent this month for the upcoming month and so on, how would I go about doing that.