How to Negotiate the Amount of a Security Deposit

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Negotiating a Security Deposit
Every single time you want to rent a new apartment, condo, or house, you’re going to have to fork over quite a bit of money — including a hefty security deposit. In case you didn’t know, a security deposit isn’t just a random fee that’s required to rent an apartment. In reality, it’s given to the landlord to provide them with extra cash in case the unit gets damaged or their tenant fails to pay their rent. Some landlords may even refer to these funds as “damage deposits.”

 Occasionally you’ll see apartment complexes advertising discounted security deposit rates, but you can typically expect to put down anywhere from one to three months’ worth of rent. The amount that a landlord can legally charge you for a security deposit depends on the state you’re in (Texas and Illinois, for instance, have no limit). Most commonly, landlords will have you pay a security deposit that is equal to one month of rent.

You should always factor the amount of a security deposit into your moving expenses, but if you use a few simple negotiation tactics, you may be able to reduce that amount. Let’s take a look at how you might be able to negotiate the price of your security deposit effectively.

Come Up with a Reasonable Request

When we think about landlords, we often conjure up an image of someone who is money hungry and out to take their tenants’ every last cent. While there are certainly a few landlords like that, most of them are actually just people trying to protect their assets. They are letting a relative stranger move into their property and just hoping that it works out for the best and that you are, as promised, a good tenant who won’t destroy their stuff. The reason why they are asking for a security deposit is because there are unfortunately people out there who will not be good tenants and either damage the unit or flat out stop paying rent.

The good news is that it is entirely possible to negotiate this security deposit, especially if you know that you are a particularly good tenant. Don’t get greedy here. If your rent is $1,500 per month, don’t expect a landlord to go for your offer of a $100 security deposit. If your security deposit is also $1,500 per month, start the negotiations out at about 30 to 40 percent less and see if they agree to your terms.

Be realistic in setting this amount, and remember that every good landlord-tenant relationship requires a solid foundation of trust. Demanding an unreasonably low security deposit will only create hard feelings and start the relationship off on a bad foot.

Consider the Circumstances

There are certain circumstances that will always make negotiating easier. Having good credit, a stable income, and no pets are just few things that are sure to help you out. An apartment that has been on the market for a long time, is in a strange location, or has any other undesirable qualities will also tend to be more lenient about negotiations.

Asking: The Art of Negotiation

First and foremost, negotiating is a process. Once you have set an amount for the security deposit, ask for that amount. If your landlord gives you a flat-out refusal, it does not mean you have to accept defeat. Ask to speak with a higher-up if there is one, and repeat your request to that person. Include the reasons why you are making the request (the deposit is too high, your credit and background are very good, or you don’t have any pets that might damage the apartment). If you have multiple options for an apartment with similar rent prices but lower security deposits, make it known to the landlord. They may not realize that the amount they are asking for is unreasonable. After all of this information has been presented, the complex or landlord might make a counter-offer.

If your landlord does counter, try to meet them in the middle when you counter back. The end result of this tactic will be that the two of you feel as though you have both won.

Don’t Attempt to Negotiate Too Much in a Tight Market

Some rental markets are just tighter than others. If you live in an area that has notoriously high rent prices and a very low vacancy rate, you might not want to push your luck by trying to negotiate just in case you end up losing out on a great apartment. Just be aware of whether or not you have any competition for your place and if they’d be willing to pay a full security deposit for it.

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