Keys, money, move in date?

[HoldAndBuy]

If I get someone who applies now, but they're move date is, let's say, a month from now, what's the best solution?

Should I try to collect the security deposit & first month's rent from them now, sign the lease with them, and then give them the keys one month from now, on the day of their move?

Or just collect some kind of non-refundable deposit to hold the house for them one month (and then stop advertising the house). And then get the security deposit and rent a day or two before their move date, and have them sign the lease then?

Thanks

[davewindsor]

Or just collect some kind of non-refundable deposit to hold the house for them one month (and then stop advertising the house). And then get the security deposit and rent a day or two before their move date, and have them sign the lease then?

Thanks

That's what I do.  Application approval.  Then, last month's rent to hold it by cash, certified cheque or money order.  Once they paid last month's, they sign the lease.  First month's rent and key deposit when they move in.  If they move in a few days before, they pay for those days pro-rata. 

[HoldAndBuy]

Thanks Dave. One problem is,  this is a low to moderate income area, and most of the people aren't able to come up with first, last and deposit at one time. So I'm just asking for the first month's rent and the deposit to move in.

So would it be a good idea to just take the same amount as the security deposit as a  "holding deposit", with a signed agreement that it is non-refundable if they don't pay the rest of the money at the move in date and move in, and then apply the holding deposit as the security deposit on their move in date?

[tatertot]

Take a non-refundable holding fee or reservation fee. Deposits are refundable.

I take the cleaning deposit amount, and the holding fee converts to the security deposit at move-in. Have a receipt that outlines the terms.

Have a drop dead date for their move-in.

Rental contract signed, utilities switched, and the rest of the fees all paid before you hand them the keys.

I don't sign the rental agreement until all money is paid, because as soon as that is signed, they are your tenant and have tenant rights.

[justin0419]

Here's what we do:
1.  Take completed application and application fee for every adult who will live in the house.  I hand out our policy sheet w/ the application so people know what they're getting into.
2.  Run criminal background checks, check for evictions, verify income, etc.
3.  Once cleared, we meet w/ applicant to collect security deposit.  I let them know this actually "holds" the unit for them.  If they want to pay a deposit w/ the application, I'll take it but only from that one applicant.
4.  The deposit is held from the point of completed application thru the duration of the lease.  They have to tell me on the application when they anticipate moving in.  I have not had applicants looking to move several months from when they're looking at our places.  I have no problem holding a place for 2-4 weeks for someone.  Many times the process for section 8 applicants takes 3-6 weeks to get them in anyway.  

Remember, all the rules change once they get the keys.
5.  At move in, I collect one full month's rent in the form of cash or a money order.  I don't want someone scamming me w/ a bad check to get in there.  If someone moves in toward the end of a month, I'll give them the option to pay the full month's rent and the pro-rated amount for the extra days all at the same time.  I don't want the situation to arise where someone moves in on the 25th, pays a small pro-rated rent amount, and then can't pay the regular rent on the 1st.  I want to know they have the money.  Sect 8 tenants are different.  If I know Sect 8 is covering their rent, they get to move in anytime after the inspection.

Lately we've had so many calls from applicants that we're having to show them houses as soon as we get the keys (pre-rehab after purchasing foreclosures).  I just tell them what my plans are with the property and that it will be 4-6 weeks before I'm done.  So holding properties for applicants hasn't been much of an issue.  
We're in a low income area so we keep our deposits low.  For a $500/mo house, I usually get $300 in deposit.  Up around $575/mo, I get $350.  If we either made the deposits high (I saw a sign the other day wanting $750/mo and 750 deposit for a house comparable to what we'd charge $600-650 for) or wanted first, last, and security deposit - we'd never get tenants.  People don't have that on hand.  

Our philosophy is to be very competitve on the rent amount, have affordable deposits that will cover a little damage, and keep people happy to avoid turnover.

[HoldAndBuy]

Thanks for the helpful advice!

The house is on a builder's risk policy with TAPCO right now. Once I get a tenant in there I need to switch it to a landlord's policy with another carrier, Tower Hill.

My insurance agent told me that once it switches over, Tower Hill will want to see a signed lease with a tenant and it will need to be occupied within 30 days, or else the new policy will be cancelled.

Some of these people are so flaky that I could see one of them changing their mind at the last minute and not moving in. So the nightmare scenario would be having them back out and then getting dropped by Tower Hill and having an uninsured house. Has anyone had anything like this happen? (I don't know if I'm worrying about something that's very unlikely to happen)

[justin0419]

We use Guide One and Foremost.  Guide One is a very low rate and it doesn't matter if it's occupied or not (same rate either way).  Foremost has a little higher rate when it's vacant, but I just call my agent when we fill the houses to get the lower rate.

[HoldAndBuy]

We use Guide One and Foremost.  Guide One is a very low rate and it doesn't matter if it's occupied or not (same rate either way).  Foremost has a little higher rate when it's vacant, but I just call my agent when we fill the houses to get the lower rate.

Thanks. I knew Foremost didn't do Florida. I found out that Guide One is here but they only insure churches in this state. I guess I have to stick with Tower Hill for now.

[HoldAndBuy]

Justin, at what point do you actually sign the lease with them? The day of move in, or before? Thanks.

[justin0419]

The lease signing signifies the transfer of the unit to them.  They can tell me when they want to move in and I'll work it to meet with them on that day.  On that day, money changes hands, they get the "brief" on the lease, and the keys.  I go thru all four pages of our lease and explain the different sections.  That way I know they've had the rules explained to them. 

[HoldAndBuy]

thanks again

[HoldAndBuy]

This is dumb (sorry, I can't remember), but does the tenant get to keep the original, signed lease and the landlord just keeps a photocopy of it, or is it the other way around? Thanks.

[justin0419]

I operate pretty simple.  I just take two printed copies of the same lease with me to the lease signing.  Everyone signs both.  They keep one and we keep one.  In general, it would be common for the customer (tenant) to keep the original of anything.  If you write a receipt for receiving rent in cash, the tenant gets the original and you keep the carbon copy in your book.

[HoldAndBuy]

I operate pretty simple.  I just take two printed copies of the same lease with me to the lease signing.  Everyone signs both.  They keep one and we keep one.  In general, it would be common for the customer (tenant) to keep the original of anything.  If you write a receipt for receiving rent in cash, the tenant gets the original and you keep the carbon copy in your book.

That sounds like a good idea.