Since not one applicant can produce both the deposit and 1st months rent on the same day, I have decided to accept a 'holding deposit' which will hold the house until January 3, 2018.

My deposit here is $500.00 and I am about to write up the terms of this holding deposit. The #1 criteria here is this deposit is NON-REFUNDABLE and will hold the house from today until January 3, 2018. If for any reason, you change your mind or bail on me between now and January 3, 2018,...you will forfeit this $500.00.

Roy in AL whats going on over there? Holding this proeprty for so many days? We have a letter outlining, once a person is accepted, what and when money is due. The deposit can hold a home for 3 to 7 days max. Your talking a whole month?

One ploy we use is this we tell the applicant we can hold, if its before the 15th of the month for the deposit and pro rated half months rent. After the 15th of the month they will need deposit and full months rent. We will prorate the next months days. We are not allowing anyone to move in with a deposit and just paying 10 days rent (if they sign say the 20th of the month) Has worked for years.

MYOB

When you a Class C tenant pool, all of your applicants 'net worth' is determined by whatever amount is coming on their next pay day. My applicant's next pay day (disability income which is so common in my tenant pool) is January 3rd. 1st month's rent will be paid then.

I have given up on trying to collect any rent for December,...I have missed the December 'rent window' which here is always in the last 7 days of each month.

All LL's here are scrambling to fill vacancies before the winter doldrums hit (Dec.25th -Feb. 2018). I will admit that I am getting a little desperate myself since I have 2 more vacancies coming on Dec. 18th and December 31st.

well more facts are given. wasn't a lecture just wondering whats happening in my neighbor states rental market.

take this for what it's worth. why aren't you putting this prosepct into the dec 18 or better still the dec 31 vacancy? and continue to show the one empty now?

Why are 3 leases expiring in December? That's not lecturing just questions. (needs diability income-- thats not collectable income-- neithe ris SSI. But you know that.)

Can I now question what your doing? You've posted for years here and now your all defensive?

I have to agree with Roys plan since I have several folks whose income is based on either disability or social security. Checks typically come around the 3rd of the month.

In addition, there are folks who want to rent, are on month to month tenancies and, surprisingly, follow the requirements to give their current landlord a 30 day notice they are moving. I've got to give them credit for doing that since so many don't bother to do so.

MYOB and others:

I sincerely apologize for my negative 'tone'. Since last August, I have been averaging one vacancy a month (each vacancy is costly too). I had to do a major $7K on the house that came vacant November 1st and it is this newly rehabbed house that I have been showing since the last week of November. There is no shortage of applicants here, however, they are ALL living with relatives and do not have any more than $500.00 to their names. That is my tenant pool right now. It is what it is and I just have to deal with it. Again, I apologize for my tone but it just irritates me to talk about my pathetic tenant pool. I remember the good ole days when my tenant pool much better than this.

I still have tenants living in my next 2 vacancies (1 is being evicted and the other I am losing to the LL who called last week). I can't do anything (now) with these 2 houses until the tenant's actually vacate them.

I just finished typing my 'holding fee' terms document. I am using the word FEE and not deposit.

It is what it is.

That and $1.50 will get you a Cup of Coffee.

As I always say, we have to find what works in our area for us. It is great to see how others do things, and get ideas on this board.

Roy, I do a holding fee. That fee converts to the deposit when they pay the first month rent and move in. Unless the date passes, then it is forfeited.

Roy sorry you're having some bumps but you'll weather them. I have to admit this time of year for LL'ing is hard. Some low lifes come out of the woodwork knowing "tis the season to sc re w the LL" and get sympathy from the court.

Unless you've been a LL you never realise it.

Holidays are coming so with your years of experience you know more GREAT times are coming.

Again, I remember the days when all of my applicants had good paying union jobs (Goodyear, Honda, etc.). Now, all of my applicants are sitting at home collecting disability checks (and they are not disabled either). With I visit this rental neighborhood, each day I over-hear someone say "My lawyer just called and said my first disability check should arrive any day now". What is even worse is 'there is no shame in being on the government dole'.

We require a $500 deposit to accompany the application before we will even process the app.

It is called a deposit as is required by NC. However, our app states that the deposit will be returned within 2 business banking days only if they are not accepted. If they are accepted the deposit becomes non-refundable and will be applied to their first month's rent.

In NC we are required to deposit all SD funds within 3 days (1 if cash) and we have to reconcile our Trust accounts every month so we do not even mention SD.

For you to accept a holding fee seems like it binds you from a better opportunity.

Unless, this holding fee person has something that you have not described - don't do it....as you have posted on numerous occasions, It is expensive for you to evict and expensive to turn over.

I do not do holding fees. The first one approved and with all the needed funds gets it. Sometimes an applicant will wait a few weeks after being approved for their next paycheck to get their net worth high enough to pay the rent and deposit. If my house is still available, they get it, if not they may be interested in the next one I have available. But, I did not tie up my house with a holding agreement, so if a qualified applicant ready to pay and move in now comes along, I can rent them the home.

I will agree with the advice of others, this is a fee, not a deposit. I have always thought it was strange that this non-refundable fee so often is described in the agreement as becoming a refundable deposit after they move in. That seems like it is refundable, then. If I were doing a holding agreement with a holding fee, I would draft it as an option contract. They pay the $500 option/holding fee upfront and it is non-refundable. That gives them the right to rent my house on Jan 3 for $25 the first month, and $525/month after that for 12 months and they must provide a deposit of $525 on Jan 3 also. This keeps my option/holding fee from ever being refundable.

I also like the idea of renting it cheap for December with the regular rent starting in January better than the holding agreement. Collect the deposit as normal, but first month's rent is just $1. This gets them to sign a lease which you already know how your judges enforce rather than a holding agreement you aren't sure about. It also gets the tenant paying the utilities instead of you. And, you were already planning not to collect any rent for December, so the $1 or $99, or whatever you choose is that much more than you would have had otherwise.

Roy, I use the holding fee all of the time as few have all of the money. I leave myself an out as well. Here's the language in my Holding Fee Agreement. I've never had anyone who lost the fee due to not being able to move in. If they pay, they're pretty much committed. I did have one situation where I exercised discretion and returned the money. I've not had this vetted by an attorney:

NON-REFUNDABLE HOLDING FEE

I, ________________ received __________ representing a non-refundable holding fee for ___________________________. This holding fee shall be credited to tenant’s security deposit upon move-in. However, if tenant does not move in for any reason, other than Landlord’s decision not to rent the apartment, this holding fee shall be forever forfeited and shall not be refunded. Lastly, I retain the right to not rent this apartment for any reason and in my own sole discretion, however, if I so exercise my discretion not to rent this apartment I will return the holding fee in full.

____________________, __________

Date

By my signature(s) below, I request that the landlord accept __________ as a holding fee for _____________________ and the payment of such fee shall result in the Landlord not accepting any other tenant(s) for rental of this apartment up and until the commencement of my lease on _________________. I understand that this fee will be credited to my security deposit when I move in. I further understand and agree that if I should change my mind or become unable to move in for any reason, other than Landlord exercising discretion not to rent the apartment, this holding fee will be forfeited by me, and I will receive no refund of the fee.

Monthly rent per lease will be due upon move in the amount of $____________. I acknowledge and agree by my signature below that the additional money I will owe at the time of move in is calculated as follows:

Total security deposit of

First Rent:

Pet Fee and Parking

Less Holding Fee

Equals money due upon move-in

Lastly, I agree and acknowledge that Landlord may choose not to rent to me for any reason, however, upon Landlord so electing not to rent to me, I will be entitled to a full refund of the holding fee.

__________________________, __________

Date

If the person otherwise qualifies, and they have the deposit, I'd do the cheap rent for December as long as they can get the utilities turned on right away. Collect the $500 deposit and actually make it the deposit.

Then, they pay rent as usual in January - but that gives them the rest of the month to get settled. Why tie up the home for the rest of December and you paying utilities when you don't know for certain they'll have the rest of the money needed in January?

I have accepted the $500.00 non-refundable holding fee. If they do not pay the 1st month's rent on January 3rd, then I keep the $500.00 for an empty house no one ever moved into. If the next rental applicant in January wants the same $500.00 holding deposit deal, I will do it again.

Instead selling an Option to Buy, all I am doing is selling an 'Option to Rent' for $500.00. It is their choice as to whether or not they want to exercise that option in 3 weeks.

David (MI)

Roy of AL, WHAT IF you tried the lease purchase or a land contract you hold the note in the land contract and IF they go south you do it all over again. Give the land contract a try on the next two houses you have coming vacant. You may find a better payor and then again you may not but its worth a try. You are the one holding the note. The deed stays in your name until the full balance is paid off. Talk to your attorney about the best paperwork. When you sign all the paperwork have them sign a quit claim deed and this will be held IF and when a lease purchase or land contract buyer goes south you can record it getting off the chain of title. Now I am not sure with the lease purchase if a quit claim deed is needed. Check with your real estate attorney what is the better option for you.

Best of Luck! Yes it can be very frustrating when tenant pool drops to a class D, E, and or F. At that point it may be better to leave the vacant units until the market gets better in the early spring. Financially thats a killer with 3 vacant units and no rent.

Roy what if you discounted the rent for Dec, Jan and Feb. I know you like to have your rents above market what if you dropped them to at market or 10% below market rent. Lets say drop the rents by $200 a month. Thats a hit of $2400 a year x 3 units $7200 a year for 3 units. HOWEVER, 3 months of no rent at $800 month is $2400 x 3 is $7200. so its a wash at that point.

I use a holding agreement form.

I ask for $50 for every week you want me to hold the place for you.