I realize this is going to be a widely divisive topic, first off. I'm throwing it out like a kid in class with spit-wads to see what "sticks."

In a recent post, Marie[MO] mentioned how Missouri has added a requirement that LL's keep all deposits in a separate trust account. First, thanks to Marie! I hadn't heard about that yet, so I'm already out of compliance and need to "fix" this issue. I'm going to look into getting that set up today.

However, it got me thinking: is a deposit necessary?

I posted on the concept of a "sliding scale" deposit awhile back. Looks something like this:

Rent: $500, Deposit: $500.

Rent: $525, Deposit: $350.

Rent: $550, Deposit: $200.

Rent: $600, Deposit: $0.00

Granted, the first three won't help me bypass the new requirement, but the middle two will at least help compensate me for the added hassle.

Deposits can be dangerous sometimes. I think back when I was a newbie land lord, I used to think, "Well, I won't file eviction just yet...Joe is only 7 days late and his deposit equals a month's rent...so I'm 'safe' to wait another week." Baloney Slices! I'd end up evicting Joe and the deposit was nowhere near enough to cover lost rent, legal costs, and damages. My delay brought on by the "security" of the deposit cost me another 1-2 weeks rent. I would also sometimes overlook some pretty obvious negatives during screening because "I had a deposit."

What do you all think: are deposits a crutch for tenants and land lords? Would we do better to screen more thoroughly and act more quickly once the rent goes unpaid? What other ways could we compensate ourselves for taking no deposit, or a smaller deposit? How else can we ensure the tenants have "skin in the game" so they are not tempted to leave our places a disaster at move-out?

I realize this will vary since some states mandate grace periods and partial payments screw up the eviction process. In Missouri, there is no mandatory grace period and late fees begin accruing immediately. I can file the day after rent is not paid and the case moves forward until everything is paid in full or I get judgment for possession and money owed.

Becareful what you print here. I can assure you tenant advocate groups read this forum to gather info for their cause. How helpful it would be for them to show LLs saying they dont think a rent deposit is required.

As a LL for almost 30 years, I have personally experienced deposits are a necessity. In many areas, including ontario Canada, tenants are given a tremendous advantage over Landlords. This advantage includes free legal representation, adjudicators heavily favoring tenants due to the far left socialist environment at hearings, and legislation written to benefit tenants and place landlords, (especially small private LLs) at a disadvantage. Our rental tribunal is now called The Ontario Social Justice Tribunal! (It doesnt take a rocket scientist to see how poorly treated Landlords would be in this environment)

In ontario (and I suspect many other jurisdictions), tenants dont have to give their social insurance numbers to the LL. In fact our govt recomends tenants do not give this information and tenants do not have to give a forwarding addresss, this means it is often impossibke for a LL to find a tenant who has left the property and owes money.

Eviction usually taking at least several months and can be easily further delayed by the tenants.

LLs here have to wait 14 days past the rent due date before they can even begin to file for an eviction.

Furthter, we are NOT allowed to collect a damage deposit, making the rent deposit that much important. Our rental laws already discourage LLs from collecting a rent deposit by stating if the deposit is not collected before the tenant moves in, it can not be collected.

Even if the social justice tribunal does finally allow an eviction and judgement against the tenant, the odds of actual collection is slim. Many collection companies wont even accept a judgement against a tenant as they know the chances of collection are slim. If the collection agecy will take on the case, they charge a 50% fee plus 13% taxes.

On top of that, our human rights laws are heavily favored for tenants: it states "housing is a right" and places LLs under extreme pressure to accept high risk tenants. One of the laws actually says a LL can only require that a prospective tenant has enough income to pay JUST the rent, NOT additional real costs such as food, transportation, clothing ect.

Deposits are necessary; they are required.

Even tenant advocates realize preventing landlords from collecting a rent deposit would quickly strongly discourage investment in much needed affordable rental housing, and force remaining LLs to reject all tenants that dont meet the new higher screening requirements as a result of the greater risk from no deposits.

Sid,

You are handing over and asset worth tens of thousands of dollars to someone you don't know and trusting them to pay you rent and care for the property appropriately.

I can't imagine doing that without a deposit. In a situation gone bad the deposit never covers the loss but it helps. It also shows you are likely dealing with someone who is mature enough to have saved the money needed for the deposit or at least one who has a family willing to help them get started. It's another screening tool.

I have never had a problem with anyone who paid me my greater than a month's security deposit. I've only had issues with the ones who needed me to break them up from the get-go.

I rent to what I term the working poor. they have little to no savings, no assets, no family to borrow from. Savings for a security deposit is very difficult.

The past twoish years I've been playing with deposits, especially for my efficiency units. some of what I've done: I've broken it down into payments. I've completely eliminated it but raised the monthly rent so that at the end of 12 months I'm "whole" and going past the first year I am ahead of the game. when they don't have the deposit, I apply the money they have to the deposit and then make them pay additional rent monthly until the deposit is funded ...although I don't word it that way so that if they don't pay, I can easily evict.

Example: I want $500 rent and $500 deposit. they can't come up with more than $500. I've taken the $500 that they have and used it for the deposit. For the next six months the rent is actually $585 and then month seven rent drops to $500. I've taken this same scenario and had raised the rent to $560 with zero deposit but the rent doesn't drop.

I figure the deposit also covers the first few months they rent, so just raising the rent won't give me that deposit. If they do a bunch of damage in the first couple of months, then leave, I won't have money to cover it. After a few months, I know what kind of tenants they are, so less likely I will need it.

My deposit is not always equal to a month rent. I have one tenant that moved to a bigger unit, yet their deposit is the one they had at the smaller unit. They left the small unit spotless, they are great tenants and I don't think I would need the full amount of a month rent. I have one that is more than a month rent. Yes, I have to keep track of each of those, which could get difficult with a large number of units. But I base it on my units and how I feel about the tenant.

The dominant Property Management Company in my town does not require a "deposit". Instead, they charge a "move in fee" equal to 1 month rent + 1st month rent.

I think that I will change over to this system at the new year.

Nicole brings up a topic that must always be considered; know who your customers are and avoid square pegs in round holes systems.

Put another way: should I really be dealing with people that are indigent?

Unfortunately our rental laws are so biased against the landlord that I simply cant afford the risk of "working" with a prospective tenant.

Therefore I must first and last months rent when the lease is signed and BEFORE the tenant is given keys....period....no exceptions.

This means that some good tenants are rejected as they dont have the funds on hand for first and last. Ironically it was their advocates that created this situation.

If the rental laws were fair, if the human rights commission treated landlords reasonably, if the ontario social justice tribunal treated landlords fairly, if evictions could be done in a reasonable time frame at a reasonable cost, if tenants could be held accountable........ but until then the only modicum of protection I have is the rent deposit.

NJ has required a separate account for some time now.

With a rental house valued at 5 to 25K I guess I can see tour point. With a 3/400K asset it damages quickly even some not terrible damages/lost rent adds up to thousands rather quickly.

What caught my eye with the replies is the "fee" equal to the rent. I wondr how a Court will look at it, lease notwithstanding...i.e. "if it walks like a duck quacks like a duck = its a duck". OR potayto/Potahto, Court can say call it what you want its a depo and throw it the "fee" language out.

Of course if the ultra-Corporate outfits have it their lawyers have either signed off with it being legal its just "we shall wait till challenged then apologize"

I kinda like this idea actually, Sid.

So -- do you mean that you might offer this as an OPTION to tenants? Like, say you have a unit that you'd normally rent for $500 and a $450 S/D. Are you thinking of offering that, as usual, and then ALSO the option "Or, you could pay $500/month with no S/D required"?

Or no? Interesting either way -- I'm going to give it more thought actually...

- John...

Sorry -- typo'ed on that. I meant "Or $600/month with no S/D required" for that second option. Basically, $100 more per month to not have to pay an S/D.

- John...

have not heard about any Missouri separated deposit account.

if so I may go to double first month's rent, no deposit. I like that set up. Easy to understand and done. clean.

I am actually moving the other direction. MI has a very strict limit on security deposits, 1.5 months, and last months count towards that.

I'm considering contacting the local Rental property owner association and seeing how we can get the state law changed to allow for more security deposits.

Thanks to all who have commented so far. You've given me lots to think about.

Need to clarify a few things. This would be an option, not a requirement. My goal would be to obtain enough extra rent during the first 6-8 months of the tenancy to equal what would have been their deposit. The plus side is it's not a deposit. It's rent in my pocket I get to keep forever and ever, Amen. The rent would stay the same after the first 6-8 months, so if they were paying a $50 "bump" for the privilege of a $0 deposit, I'd come out ahead $200 after the first year and $600 per year after that.

I am looking at my tenant data and it seems to make sense. I've only evicted 1 tenant in the past 2 years, and that was after 6 months of paying rent. So if he'd have been on my "$50 rent bump/no deposit" plan, I would've only had $200 less than what I would've had if I had collected a $500 deposit. If even one of my other tenants I haven't evicted over the past 2 years took this plan, I'd be almost $800 ahead in rent. More than enough to cover the $200 "missing" from the 1 tenant who got evicted and didn't have a deposit.

Car companies frequently want deposits on leases for vehicles.

But they do the same thing you do, you can buy down the money rate on a lease with multiple deposits,(which lowers your payment) with BMW I think up to 7.

In 20+ years of doing this, I've had

1) one case where the tenant did $10K worth of damage,

2) one case where I had to evict and the tenant did about $1500 in damage and dirt and owed about $2000 by the time I got them out, but there are no assets to go after.

3) one place where the tenant left about $500 worth of cleaning to be done and damaged the hardwood floors

4) a bunch of places that needed $100-$300 worth of cleaning or less.

For the most part, I take the deposit and they expect it.

Chris, great comparison. I think car leasing companies have two advantages though

1) easier to repo car than evict tenant

I get some houses returned in rent ready condition and these houses were always kept clean during the tenancy.

More often, I get houses returned that were not always kept tidy and clean, at conclusion of lease then have been cleaned, but are still not rent ready and the deposit return process is contentious.

The partial cleaning is about all that I am giving up by dropping the deposit....and it ain't worth much.

As for damages: anything is better than nothing, but $500-$700 won't pay the bill for much, if I am to be paid and the tenant refuses- then it is courts, judgements and garnishments.

I understand the apprehension of handing over the keys with tenant having no skin in the game....but 1 month rent doesn't fundamentally change that issue.

Good resident screening and avoiding the indigent seem to be keys.

Now if deposits were customarily equal 1 year of lease payments, then I could understand how it would greatly influence tenant actions, but that is not customary.

What I think it boils down to is an 8% increase in first year rent income vs. a small amount of additional cleaning.....tenant still liable for damages.

I believe a security deposit is required in order for Tenants to have some skin in the game. In some cases the deposit only mitigates losses from rent and damages. I think in the long term the extra rent would not cover your losses.

SID,

You got me thinkin...I like that!

I like your choice of words: Crutch.

The first thing that came to mind is the phrase we hear so often "Just take it out of my deposit." I think about #2Son's college apt bathroom, shared with one other boy. NEVER cleaned it. They made the decision to let the LL take it out of their deposit rather than be bothered with cleaning every so often. He paid his own deposit so it was his decision and learning experience.

Note to self: I need to ask him how much the LL charged! He mighta been shocked!

Next I remembered Jeffrey's talk at Convention about returning $100 of their deposit each year as a thank you and renewal "gift". No expense to the LL.

Then I remembered a survey I saw long ago that said most renters do not expect to see their deposit again. They tend to think it's money SPENT, gone, kind of a "cost to enter".

A few years back when I was a casual B.R. LL (B.R. Before Recession) I did a 5 year study and discovered I had kept almost every penny of deposit money (remember "Casual" - I was not firm about charging real prices for repairs, was cleaning up for free...). The very few deposits I DID return were complete, no deductions. It was either all or nothing. Mostly nothing.

Even with my low, naive charges we still racked up an embarrassing amount of unpaid court judgments. The figure would be significantly higher without deposits.

I like your thinking. People don't have money. We still collect a deposit and first month but we will sign and give keys with just the depsoit amount (same as if I got the first month's rent) and a plan to pay the rent. PayDayPlanRent makes this much easier as they only need one week of rent. OR they were paying weekly anyway to catch up.

ALWAYS credit any monies to deposit first, THEN rent. If they flake out quickly, ans it DOES happen, you have their deposit to use. Cannot sue in court for unpaid deposit.

Gotta know your judge. One nearby judge will charge the LL triple deposit no matter what damages if the deposit is not returned properly. If that were MY judge I'd seriously consider a deposit-less lease.

Same with special accounts. I don't need any for deposits in Indiana so it's easy here. In fact, the money is "usable". If a LL had 50 homes x $800 deposit = $40,000 capital.

Notice Elon Musk. He raised $180,000,000 capital in 24 hours by taking $1000 deposits on the "planned" car to be release "sometime soon".

BRAD

Back to your original question I will still take deposits because my applicants expect it.

Except if we need to run a $99 Winter Special - even then they are confused!

BRAD

Since the rules are different in Chicago, I know many Chicago area landlords are not charging deposits anymore. Apparently the judges up there are very strict on how it is returned. They are charging a move-in fee. Hopefully someone from there will chime in otherwise, I know you can look it up. There's been some discussion on our Illinois landlord's Facebook site.

RichE, your success has inspired me...think I'm going to try it when I have a unit come vacant in Nov...that's about the time I run "move-in specials" anyway, so what's to lose? A $99 deposit? Heh, keep the change, ya filthy animal. (name that movie!)

S i d, for the last couple of years I have been encouraging landlords to consider offering all new fully approved residents the following option for Move-In Funds Requirements -

Option A. (Traditional) 1 month's rent plus 1 month deposit or

Option B. 5% higher for monthly rent plus 50% off deposit.

So using your original numbers, injecting my formula the Move-In options you would offer would be:

A: Rent $500, Deposit $500

B. Rent $550, Deposit $250

For those with higher rental amounts, simply use the formula I gave above to figure what your options would be.

This plan is very easy to convey to new residents. And it suggested that the options actually be incorporated and presented in the lease. That way, anyone doing the new resident orientation for your properties will not be able to neglect offering the options.

And as you can imagine, sometimes new residents actually ask us before the orientation begins if we can work with them on the deposit. Our response. "We actually offer you two options right here in the lease. Choose the option which works best for you."

Because of the management systems I implement, it is on very rare occassions (if at all) that I have someone move before staying with me at least a year. Likewise, seldom does damage build up to any significant amount during that first year that the resident doesn't cover while residing in the property.

Jeffrey, I see your idea and I LIKE it! Can you clarify on the percentage though? You said 5% add to rent if lower deposit, but the amount of rent given in the example is actually 10% higher.

My mistake, I'm used to giving the example at seminars using $1000, as the traditional amount which results in the added $50. With $500 as the traditional rent, the 2nd option would be $525. Thanks for catching that because I'm sure others would have seen it and also had a question.

One other note; even with just 5% added on to whatever your rent, as long as your renter stays at least a year, the additional rent received over the year added to the the smaller deposit, will still be more than the traditional deposit that most landlords require. I mention that for landlords who are concerned that the smaller deposit received will be less money to cover themselves in case of damages after a year.

Some landlords may think 10% added rent may be more to your liking, but my goal is to offer an alternative rental rate option that seems extremely reasonable to the average renter, and also does not push him or her beyond more than his budget can actually handle. Because if they really can't afford 10% higher, then I'm only creating a situation that won't last and add frustrations for everybody.

Don, I hear you you. However, I made a point of saying the options are made to applicants who are "fully approved". In other words, they have met my requirements, and are qualified to pay the full rent and the full deposit. I'm not suggesting making the offer to people who can not afford to pay a full deposit. No I'm making the offer to people who are prepared and qualified at lease signing to pay the full deposit.

You may then ask why would they want to go with or even ask for the lower deposit option? The same question can be asked of investors when given an option on which mortgage they want and how much they want to pay as a down payment with their next property purchase.

One option may require a lower down payment and slightly higher interest rate and monthly payment Another option may require a larger amount down with a smaller interest rate and monthly payment.

Guess what. Some investors (even some reading on this forum, including myself) in the past end up going with or choosing the mortgage where a smaller down is paid upfront even though it means a slightly higher monthly payment Why, because want to do something else (hopefully smart) with part of the down payment we would give the lender.

if they can't afford the rent and deposit they can't afford to rent my home. my rents are well in excess of the $1,000 mark so i am sure that the lower rent ranges this would be a nifty plan

Yes, Sisco, I also sometimes hear that attitude from landlords when offering pay day rent payment plans, as though I'm only offering it to people who can't afford to pay rent once a month.

In those cases I use another mortgage analogy. Some investors choose 15 or 20 year mortgages, while others choose 30 year mortgages. They are qualified to obtain either one, however many if not most property buyers still choose the 30 year (pay day plan) even though they end up spending FAR more interest in the long run because for whatever reason it works better for their budget or cash flow. Hmmmmmmm.

I dare say that many on this forum, again myself included, at some point have selected the 30 year pay day (oops, I'm sorry, I mean pay back) plan do so. Not because we are not qualified and not because we are not intelligent. It is just the plan that we are used to and feel works better for our budget. Of course, those doing 20 year or less terms would think, why in the world would someone do the pay day mortgage plan:)

I think Barb [MO] makes a superb point.

The prospect of a deposit refund will alter a tenant's behavior. They will do what they can to get it back. No incentive if there's nothing to get back.

Of course, there are the guys who just expect to lose it and do nothing to prevent that. Same difference either option.

I always get a sec. dep. of at least 20% more than rent.

No one bats an eye at that.

(Our lease makes it clear that failure to pay the last month's rent incurs a $1,000 fee. Of course, no one reads the lease. But it is useful to have it there. A couple of times it has prompted that last rent payment.)

I see the advantage of getting the sec. del. paid as rent so you don't have to return it. But there is no incentive for the tenant to leave the place in decent condition.

Mike (CA), I'll just say this, there are many successful professional property managers with rents above the $1,000 mark who are marketing lower deposit options all day long every day of the week. They are keeping their properties full and they and their owners are smiling all the way to the bank).

Jeffrey, thank you for taking the time to chime in MULTIPLE times on this post! I think this is a personal record for me seeing you speak on one post, and I'm humbled that you see this as worthwhile.

I'm going to try this... I've seen enough good to take a chance on it. The worst that could happen is I'll lose the $250 - $500 normal deposit. I've done worse things. But my hunch is it can and will be very profitable over the long-haul.

What an incredible plan! For years we have been trying to be creative on getting decent tenants without getting screwed in the end and have tried various things: $99 RENT special first month when you pay deposit, deposits broken into no more than 2 or 3 payments due with the first 2-3 months rent, or the traditional first month rent with full deposit. We would RARELY be able to get a tenant who would pay the last month's rent too so we don't even ask. We have returned deposit very few times. Most of our tenants have lives that are very chaotic and have to break their lease suddenly and leave quickly without a deep cleaning OR they think they can live that last month rent free covered by security deposit. ALWAYS have damages, lost rents and fees that exceed the security deposit. Then we have to scramble to get the unit ready, and itemize the security deposit or possibly risk getting nailed in court. It's an added insult to injury. I'd rather just do the extra $50 a month(they must qualify) and no more security deposit at all.

Deposits are your friend! I would never increase rents and take a lower deposit. If you get a higher rent for several months, and the tenant trashes the apartment, you will pay much more repairing the apartment than any additional rent income would provide.

DONT DO IT!!

The DON'T DOs didn't read Jeffrey's post, carefully.

You need to qualify them first.

Granted, things happen (lost jobs, lost income source, spouse dies, etc etc). But, the purpose of these creative ways is to stay competitive while filling your units and filling your bank account hopefully so that you can pay your mortgage on time, your investors, your next dream vacation.

If you are really really afraid of tenant trashes your apt, use that money to have the tenant buy renter's insurance, 1 year prepaid

What if they cancel!!??

What if you and I get hit by a bus tomorrow?

What good would renter's insurance do in the case of a trashed apartment? insurance won't pay for self-inflicted damage. And even if it did, it's not going to pay the LL, it will pay the insured tenant.

Jeffrey, in the case of long-term tenants, do you ever get the push-back after a certain amount of time to lower the rent? "I've paid my deposit."

S i d, perhaps you can see why I am not quick to share some of the ideas in these short spurts on the forum which I cover in my full bootcamp trainings:)

Because many of the ideas build on and integrate with each other. And without doing some of the important aspects of other parts of my training, an idea taken out of the full teaching context, may do someone more harm than good.

Dave above is actually absolutely right (along with a one or two others above). For the average landlord, a normal deposit (or even a higher deposit) is needed. Why??? Because the average length a resident stays in this country is only a year. The average turnover cost is $2,000 to $4,000. So for the average landlord who has not taken the time to really learn how to effectively manage their rentals, the above idea is NOT for them.

I'm glad to see that Elliot and a few others above realize and understand that there is more to it than just implementing a "cute" idea. And while I exhort others of the need to fully screen, the truth is most landlords simply do not know the many ways to fully screen residents so that you can get qualified long term residents who are far less likely to do damage in your property. I'm not just saying that, the statistics prove it out, that most landlords do not screen effectively. The results speak for themselves.

When I do my bootcamps I talk in depth about effective ways to screen residents. And once the residents move in, I teach in depth about what procedures to put in place to reduce the chances of damages that will occur in your property (even with qualified residents). And from there we teach in depth on what to do so good qualified residents will stay with you (and desire to stay with you) for many years while you use creative measures to maximize your income. And so on and so on. Again, it's line upon line, layer upon layer. Doing part of it without the other, yeah you better keep asking for a full deposit:)

So let me be clear. If it is common for you to have residents who do not stay at least a couple of years. Or it is common for you to have people leaving your property and you keep all the deposit to cover damages. Then the above idea is NOT for you. Keep asking for the full deposit.

If on the other hand you honestly know that your management skills are above average (S i d, I believe yours are, which is why I got tempted to join into this discussion in the first place:), OR you are willing to take time to come to a training like the one I offer, then this idea can add hundreds if not thousands to your cash flow.

In fact, I'm going to come right out and say it at the risk of being seen talking about myself. I seldom try to sell people on coming to my trainings in the Q&A, because that is not the purpose of the forum. However, since I have already said far more here than normal, just as well go all the way to the deep end of the pool. MANY, MANY, MANY of you could so benefit from my bootcamp training.

Yes, getting ideas here and there in the forum is awesome and we learn a lot, including myself. But you can benefit so much more by coming to my indepth training that reveals and brings several powerful aspects of management together and shares how so many awesome ideas can work together to bring you far greater results than you are currently getting.

I have learned a LOT over the last 30 years. And I have made it my passion and mission to specialize and learn key aspects of the rental management to the point where I have become well respected as one of the absolute top instructors in the country. While I may not know more than some, one of my gifts however is being an outstanding teacher and to be able to communicate in a way that motivates, instructs and inpires others to improve the way they run their rentals and their cash flow. And many of those you have come to admire on this forum for their ideas have either been to or benefitted from my trainings to one degree or another.

If you truly want to maximize your cash flow. If you want to eliminate a lot of the frustrations which the average landlord faces and learn things in just two days which could take you years to learn from this website, join me for one of my live bootcamp trainings. Two days that can totally change your cash flow and your future. The next bootcamp one is November 11th and 12th. Check out LandlordingBootcamp.com.

Jim[OC], i really like the idea of the different dollar amount for the deposit. i am instituting that promptly. rental agreement has a separate paragraph citing that the deposit is not last months rent but i think a disparate amount might be a good way to hammer that home.

WMH, when communicating with residents, suggestion. Never stipulate in the lease that the rent is broken out for specific "line items". For example, never in the lease break the rent into individual line items which stipulate that the renter is paying $25 extra to lower the deposit or paying $25 extra for a pet fee, or $25 for this and $25 for that (i.e, 500 for rent, $25 for pet fee, $25 for additional person, $25 for washer, $25 for dryer, etc). I know that's a bit much, but some landlords actually go to that extent. Because you are right, if stated that way, from the resident's perpective, after a certain point (dog dies, extra person moves out, washer no longer works) most renters would indeed think the "extra" should no longer be required.

Intead I would simply state in the lease one total amount of rent. Even if they are choosing between rent options as discussed in the first part of this thread, it's either a total of this or a total of that. But again, the total rent selected is not broken into individual line items. That way you are not creating a "line item" mentality with your residents. In the same way, when you buy a combo meal from McDonalds, the customer is not walking away thinking they paid 2 bucks for the burger, 75 cents for the fries and 24 cents for the drink. No, most cutomers walk away only thinking they paid 2.99 for the meal (rent).

Excellent info, Jeffrey, thanks again!

I understand your point of not trying to communicate "advanced/in-depth" ideas online. Seems like it's human nature to try to poke holes or find flaws-in particular when the speaker isn't right in front of us-rather than see what DOES work and how we can modify it to fit our business.

Very interesting discussion!

One of these days, I'll be able to attend either a boot camp or convention. They always seem to fall when I have other comittments. :(

I believe a few people misinterpreted my comment about the deposit. Right now, our tenants know that we have a deposit. Some look forward to getting it back, but I believe it is very few.

I think that if I do away with it and instead charge a move in fee, probably just a slight bit less than a month's rent, a make clear it is a fee, plus make clear that if they do not leave the place move in clean as it was when they moved in, they will receive a bill, they will be more likely to clean it on the way out.

For me, it means changing how I do things. I'll still send the accounting letter, but once this goes into effect, instead of refunding a deposit, it will mean sending a bill with 10 days to pay.

Then, if they don't pay, send it to collections right away.

This also means I need to change the lease to state that if they don't pay any past due balance when due and it goes to collections, the cost of collections is added to the balance due. So I'll need to also add that to our move out letter as a prompt payment discount.