All that's due is the security deposit, for you to return as long as no damages to the property. 

It can be a looooong process here compared to states like AZ, with your deposit being held for more than 6 months, so you have to understand the process.

. - Make sure you get a security deposit and perhaps do a surprise inspection of their current home.S8 requires an inspection (mostly health & safety) before approving a lease and then annually thereafter. - Not something most landlords taking care of their properties have to worry about.There are limits to clauses they allow in your lease.

Also, is he entitled to the security deposit (minus any repair expenses)?

If I were in your shoes and you wanted to keep them on MTM I would have them still sign a MTM lease and make the one resident pay a deposit, assuming you can sign new MTM leases in your area.I personally would still probably shift them to longer-term leases anyway, but it's not a bad idea to feel them out for a few months.

Should I have them pay right now or out of security deposit whenever they move out? 

Most legal disputes are over security deposits and for small amounts.

Ziprent will write the lease, execute it, then get the tenant in the unit and collect first month's rent and deposit.

It can be a huge pain to get started but you do get your rent direct deposit every month.

The vast majority of lawsuits against Landlords are for wrongful eviction, security deposit disputes, and Fair Housing Violations.