The security deposit must be in the bank

Always collect the security deposit and any pre-paid rent before you allow a tenant to move into a property. If you collect physical rent checks, be cautious of scammers. Just because you have a check in your hand, doesn’t mean it’s any good!

Sometimes habitual “squatter” tenants will put a stop payment on the check before they even give it to you.

Then when their check bounces, and they are already moved-in, you have to go through the lengthy process to get them evicted. Meanwhile, they are living for free in your property for months!

It’s quite typical that at the time of lease signing, the tenant is expected to pay first month’s rent. Also at this time, a security deposit and/or move-in fee might be required. If so, make sure to communicate this to the tenant before they review the lease. They should provide you with the check(s) for these payments, which you’ll want to deposit immediately after the lease has been signed. Just so there’s little confusion, all this should occur about 2 weeks to 30 days before the lease would start, not on the move-in day.

At a minimum the first month’s rent and deposit should be taken prior to handing over the keys and allowing the tenant to move in. Give yourself at least 7 days for payments to clear the bank.

The story:

An elderly man and his grandchild comes out to look at his house for rent, the future renter or squatter offers a 500 deposit and 6 months of rent in advance. A total of 3500 dollars, sound good for the owner who just lost his job. This is in the state of Alabama, each state has laws that may be different. On a Friday, he takes the money, a check of course, and hands the keys to the new tenant. On Monday both checks bounce, but the squatter has move in and will not come to the door and changes his phone number. Landlord goes thru the legal channels and get a eviction notice and court date. Three months have passed, judge orders the squatter to move out in 10 days. Squatter appeals the decision and gets a new court date, another three months have passed. The squatter gets a new court date in nine months. Fifteen months have passed, no rent has been paid. The story ends when the squatter fails to show up to the court date 15 months latter and no rent has been paid during this period.

Leaseze will make your rental property investments profitable