Tip #5

Don’t Stop Advertising until you have a Deposit

Written on August 10, 2012 by , updated on January 5, 2016

money-roll-grayOnce a potential tenant says “I’ll take it”, politely tell them that you need a Good-Faith Deposit (usually equal to one month’s rent) in order to hold the property for them, and to take it off the market.

Simply explain that the deposit that is their way of showing their commitment. Once you have received their deposit, then you can stop advertising and showing the property. Then, over the next couple days, start the application review process, and get together to sign a lease.

If YOU reject them during the screening process, you will have to give their deposit money back.

However, if THEY back-out of the deal (for any other reason other than military orders), you can usually keep their deposit (check your state rules), and that cushion will give you an extra month to find a serious tenant.  You can claim this as “damages” because you took the property off the market because they were financially committed to the property.

Once the lease is signed, the good-faith deposit will be rolled-over as the Security Deposit, and will be held for the duration of the lease.

If I have multiple people interested in a property, I try to do the application review and lease signing as quickly as possible. That way, if one potential tenant backs out, it’s only been a few days, and there is a greater chance I can still contact the other interested parties.

Over all, the Good-Faith/Security Deposit is a great way to separate the men from the boys (aka, serious tenants and flaky tenants).  If they give you a hard time about it, simply say, “sorry, this property is not for you”.

photo credit: StockMonkeys.com via cc
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