Security deposits create as much headache as protection. For tenants, security deposits mean parking cash where it does not earn a meaningful return or provide a savings safety net. For landlords, security deposits create administrative overhead with additional bank accounts, state regulation, and calculating de minimis interest for every renter. Yes, the cash in a deposit represents a tangible option for property security. Without a doubt, the system is outdated.
Not all “no deposit move in” offers are the same. Some landlords offer no deposit move in specials as a promotion. No deposit move in marketing can attract new tenants. However, it comes with more risk because the landlord forfeits the deposit cash value. That’s the bad news. The good news is that options exist that offer landlords the marketing benefits of no deposit but with financial protection.
No deposit move in solutions, also called security deposit replacements, offer both tenants and landlords all the same protection without the headache. Different options use different approaches, but the general idea remains the same: tenants pay less cash at move-in and landlords retain full financial protection. Solutions vary, but the most common approaches are based in insurance and credit and use surety bonds, third-party guarantors, or credit authorization.
Landlords require security deposits as protection against potential property damage. Think about your deposit as proof that you will take good care of a home. The deposit provides this proof because your landlord can access the deposit cash if you damage the rental. If you do not cause any damage beyond normal wear and tear, you typically get the cash back at the end of the lease.
Some properties offer no deposit move in but not all. It’s important to ask your landlord or property manager if this option is available for your new lease. Security deposits often must be paid before moving in, so be sure to do your research early in your relocation process. A great time to ask, for example, is when you reach out to tour a property in person or online. If your landlord or property manager does offer no deposit move in, also be sure to ask whether it is a true no deposit promotion or if it is a financial amenity.
Knowing what kind of no deposit move in solution your property offers is key. Different solutions have different pros and cons. For example, insurance-style solutions may help you avoid the upfront cost of a deposit, but you pay a monthly fee and never see the money again. That means potentially paying hundreds or thousands of dollars in monthly insurance premiums and never getting your “deposit” back. On the other hand, credit solutions like Safely Finance offer a full deposit replacement and return your money at the end of your lease.
You still have options even if your landlord does not offer no deposit move in. You could apply directly with Safely Finance or take out a personal loan. Unlike most insurance, bond, third-party guarantor, and credit authorization companies, Safely Finance works directly with tenants instead of just with landlords.
Safely Finance is a full deposit replacement and offers optional additional funds for you to borrow to cover the cost of your whole move. For example, you could borrow a total of $3,000 where $2,000 covers your lease costs, like your security deposit and pet fee, and have an additional $1,000 for a moving truck and supplies. You can learn more about Safely Finance here.