I’ve heard that line hundreds of times in my 15 year real estate investing career. As a landlord of 27 rental units, I’ve managed over 600 tenants through the years. And of course, I’m responsible for getting them in and getting them out when the tenancy doesn’t work out.
The entire line is actually “Will you work with me on the deposit?” Now, this seems to be a reasonable request, doesn’t it? Many landlords charge the same amount for the deposit as they do for the rent, i.e. $600 rent and $600 deposit. For many individuals, it’s tough to come up with $1200 up front.
Early on in my career, I always chose to work with people on the deposit. They would offer to pay the $600 rent and $300 of the deposit when they moved in, and then promised to pay the other $300 with their next month of rent. And we both agreed to the plan. I allowed them to move in and everyone was happy.
When the next month of rent was due and I received $600 — not the $900 promised — I’d call to inquire about the other half of the deposit, only to be told they’d had a car problem and the $300 had to be put toward the repair. Okay. Next month then, no excuses. Okay.
Next month comes, another crisis. You know the drill . . . next month never comes!
I did this over and over again, trusting my tenants to follow through on our agreements. And in most cases, these tenancies ended in my filing evictions because they eventually couldn’t even pay the rent. So I was shorted on the rent and some of the deposit money as well.
I was too kind, too soft. I’ve always learned the hard way, and now I demand the first rent payment and the entire deposit up front. If they don’t have it, they don’t move in. I’m sometimes willing to take deposit money from them and hold the unit for a week or two (no longer) until they have the rent payment. But they understand that if they go beyond that time frame, I can and will rent the place to someone else and their deposit is non-refundable.
So if you venture into the wacky world of landlording and a potential tenant asks, “Will you work with me on the deposit?”, the reply is a kind — but firm — “No, I’m sorry, we need the rent and deposit up front.”
This will save you a lot of headaches (and money) as you move through your journey.