How much is too much?

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    How much is too much?

    Big 3 bed semi to let - agent on find only deal. Agent keeps moaning that just under 2 x months rent deposit is too much and is putting people off. We allow dogs and do not ask for extra deposit. What does everyone else charge? (and yes it is lodged with the DPS when we get it!)
    Unshackled by the chains of idle vanity, A modest manatee, that's me

    #2
    I think it's all relative to other properties in the market. Here the norm is 1 month to 1.5months deposit. But the amount also has to be relative to the likely costs incurred if tenants go bad.
    [I]The opinions I give are simply my opinions and interpretations of what I have learnt, in numerous years as a property professional, I would not rely upon them without consulting with a paid advisor and providing them with all the relevant facts[I]

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      #3
      Change agent! I take 6 weeks rent as deposit and don't let to dogs (or their owners).

      I am sure that 6 weeks deposit is standard practice.



      Freedom at the point of zero............

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        #4
        Originally posted by islandgirl View Post
        Big 3 bed semi to let - agent on find only deal. Agent keeps moaning that just under 2 x months rent deposit is too much and is putting people off.
        Well you are asking tenants to pay the equivalent of three months' rent up front not forgetting the silver the agent's palm needs to be crossed with. There comes a point where deposits become counter-productive. Quite a few tenants asked to pay one month's rent and a deposit equal to two months' rent are going to be broke or in debt when they move into rented property. Not a few will have said to themselves something along the lines of "They've had three months' rent and they can wait three months before they get the next lot of rent." Demanding a deposit, even a small one, sends a message to the tenant - "I am not not trusted" - and that is hardly the best way to start off a tenancy.

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          #5
          Very interesting point of view! I tend to think that if they cannot come up with £1K or so up front then perhaps they should not be renting the house as they will struggle in the future. If they will be broke or in debt from 3 months rent I don't want them as tenants (we manatees prefer an easy life)! Not taking a deposit could send the message "I am a pushover - do what you like to my property and I will have to sue you to get any money back which will fail as tenant has no assets..."
          Unshackled by the chains of idle vanity, A modest manatee, that's me

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            #6
            Products like this https://www.tenantdeposit.com/ ease the burden on prospective tenants. I would only use such a product if the rest of the tenants 'financials' added up but I suspect the 'hassle' of an insurance claim can be no more troublesome than an ADR deposit claim.

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              #7
              2 months deposit sounds too much.

              What are you trying to achieve?

              If it's to cover repairs if they trash it, you will be very lucky to get 2x deposit awarded.

              Unless they nick the kitchen, carpets, bathroom and central heating system.

              ...And set fire to it.

              .....And take away the bricks.

              If you're concerned about payment, what about RGI or a home owning guarantor?

              I've also seen insurance schemes offering 2 months rent paid costing £150 (tenant pays).

              I agree about no deposit sending out pushover signals and attracting timewasters.

              If you're worried about dog damage, put in the ad "pets considered- extra deposit may be payable".

              Comment


                #8
                Originally posted by boletus View Post
                "pets considered- extra deposit may be payable".
                Would that be a deposit in case pet deposits?

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                  #9
                  I do roughly 6 weeks-worth (in round figures) - I'm sure it helps not having a 'convenient' 1-month-rent deposit, whereby I think the tenant is more likely to withold his final month's rent payment in the belief that this is covered by the deposit.

                  Perhaps worth noting that I've never had to take more than a few pounds from a deposit (certainly never over two figures) except for the couple of cases where rent arrears were involved; on those occasions I was glad that the deposit was as large as possible!

                  Comment


                    #10
                    Originally posted by islandgirl View Post
                    Very interesting point of view! I tend to think that if they cannot come up with £1K or so up front then perhaps they should not be renting the house as they will struggle in the future. If they will be broke or in debt from 3 months rent I don't want them as tenants (we manatees prefer an easy life)! Not taking a deposit could send the message "I am a pushover - do what you like to my property and I will have to sue you to get any money back which will fail as tenant has no assets..."
                    With respect this is taking a very "micro" view of things. Many people are used to budgeting. They may have no savings, but pay their way as they go along. Paying a large deposit puts everything out of kilter. Also, if moving from one rented property to another they may be in a situation where the old landlord holds the equivalent of two months' rent and the new one wants the equivalent of three. Even if the old landlord turns up at the checkout, gives the all clear and hands over cash, the tenant will still have been pressed by the new landlord to pay rent in advance, deposit, reservation fee, admin fee and anything else his agent can think of. There are therefore some cases where tenants effectively have something approaching the equivalent of five months' rent in someone else's hands.

                    From an individual landlord's point of view the stance you take is not unreasonable, but from a wider perspective you are saying that encouraging the private sector is fine so long as we leave all the risky tenants to the tax payer to sort out.

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                      #11
                      Originally posted by islandgirl View Post
                      We allow dogs and do not ask for extra deposit.
                      Why not reduce the deposit for tenants without dogs (probably the majority) and then increase it for those that do? Dog is likely to be the cause of any non-wear-and-tear damage so that would seem reasonable; furthermore the paucity of property which does allow canine tenants probably means those owners would be less likely to kick off about having to pay a large deposit.

                      Ultimately, if the agent says it's the large deposit which is putting off the punters then he probably knows.

                      Comment


                        #12
                        Interesting how differently everyone thinks on this one..
                        Mr Lobster, we gave back £150 to our previous tenant (mutually agreed, no dispute, through DPS), 2 months deposit taken at the start of the tenancy. This covered all sorts of things from gas not replaced in a tank to a messy garden.
                        As for: "From an individual landlord's point of view the stance you take is not unreasonable, but from a wider perspective you are saying that encouraging the private sector is fine so long as we leave all the risky tenants to the tax payer to sort out". Well perhaps I am! I don't want a risky tenant hence the deposit. Interested to hear how the tax payer sorts out the risky ones though - in my experience it is me who is left to pay for repairs etc - the taxpayer in question is me, noone else!
                        Unshackled by the chains of idle vanity, A modest manatee, that's me

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                          #13
                          We are beginning to wish that we had asked for a bigger deposit than one month's rent from our current set of students as the deductions we are hoping to make total £300 more than the joint deposit. They didn't trash the place exactly, but once you've ruined five carpets, kicked in a sideboard, pulled several lights out of their moorings, burnt three chairs, wrecked a sofa, made a hole in a wall and done virtually no cleaning for the entire tenancy and destroyed ten other smaller appliances/items of furniture, it does add up...
                          'Pause you who read this, and think for a moment of the long chain of iron or gold, of thorns or flowers, that would never have bound you, but for the formation fo the first link on one memorable day'. Charles Dickens, Great Expectations

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                            #14
                            Originally posted by islandgirl View Post
                            Interested to hear how the tax payer sorts out the risky ones though
                            The local authority has to take them.

                            The HA 1988 effectively removed security of tenure by introducing assured shorthold tenancies. When a landlord decides he wants his property back he does not have to worry himself about how the tenant will be housed. The private sector is bolstered by the public sector. There was only a partial privatisation. Whilst there is clearly still risk involved in private letting, the real risk lies with the public sector.

                            If we are to have private renting of residential property there is somewhere a balance to be struck between the Labour Rent Act approach and the Conservative Housing Act approach. The Housing Act approach is too "investment" oriented and does not emphasise sufficiently a "going into the business of supplying homes for real people" approach. That was the Rent Act approach, but it failed to take account of the entrenched British attitude to being a property owner and therefore resulted in property tending not to be made available.

                            What we currently have is a system where a significant part of the population is liable to be evicted from their homes at short notice and that cannot be good for social stability. The section 21 notice may drop through the letterbox three months before the baby is due or Kevin takes his A-levels. A family may have to move over the other side of town so that the children have to change schools, dad is a lot further from his work and mum loses her social network. Of course these things may happen to owner-occupiers, but they are generally in control and have a choice.

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                              #15
                              Originally posted by mind the gap View Post
                              We are beginning to wish that we had asked for a bigger deposit than one month's rent from our current set of students as the deductions we are hoping to make total £300 more than the joint deposit. They didn't trash the place exactly, but once you've ruined five carpets, kicked in a sideboard, pulled several lights out of their moorings, burnt three chairs, wrecked a sofa, made a hole in a wall and done virtually no cleaning for the entire tenancy and destroyed ten other smaller appliances/items of furniture, it does add up...
                              Student lettings (which I assume is what you are talking about) are a special problem. Years ago, there were far fewer students and they either stayed in halls of residence or "digs" where they were not left alone. With the wholly laudable expansion of tertiary education small groups of young people suddenly found themselves on their own and free.

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