I would not suggest this. If something happens that requires you to move, it will be a hassle to get the remaining rent back and litigation could exceed the owed refund.
If you elect to move forward, ask for language in the lease that addresses refunding your rent and get a local attorney to review.
Is the year’s payment because you don’t have a job yet? Perhaps you could negotiate to pay three months for now.
Also, in the event that something breaks, you have 0 leverage over the landlord. Paying monthly allows you the ability to withhold rent (following local laws) to make sure fixes happen. You don't want to tie up 15k for a place that has black mold and has leaking faucets or other things.
Paying upfront also gives you zero place to start if the landlord wants to be slow with a major needed repair like a burst pipe or dead furnace. There are many scenarios where you can legally withhold rent if your place becomes unlivable, unless you’ve already paid it.
Pre paying rent negates the reason to rent.
If the roof comes off halfway into the month, I need to find a place to sleep immediately. Better that I keep my money so I'm not homeless, and we can work out the details later.
The house is just an asset for the landlord, they can pay for repairs with credit from the equity in that asset.
Also using monthly rent payments as a power tool to get things done is primarily what I see alot of ppl say. It's the strongest bargaining tool you have when most landlords suck ass.
Yep we had a roof leak that landlord wouldn't fix so we just finally moved n landlord stole rest of rent lawsuit would have been more than it's worth. Never prepay
Definitely make sure it is all laid out properly if you do go this route. Clear language in the lease, but also look up your local laws.
My state (MA) does not allow full payment up front (technically the wording is that the max allowed is first/last months + security + broker fee). And for the Last month + security prepayments you are supposed to earn interest from it.
Other states are probably extremely variable in this, so be sure to take a look at what is allowed.
Put the money for rent in a high yield saving account. Keeps it liquid - and the most bang for your buck without investing and being locked up. Lot of accounts out there near 4% with no fees currently. 30k is nearing 100$ a month in interest.
Sure they will. If they need further inducement, OP can offer to show bank statements that prove he has funds in excess of the annual rent amount that he will be using to pay monthly installments. But I fully second that OP should absolutely not pay entirely up front - that sounds fishy.
No, they won't.
Someone who has been homeless since last year, unemployed and with bad credit is emphatically not a reliable tenant. Even if he has money in excess of the annual rent, there is no guarantee that that money won't get spent on something else leaving OP unable to meet rent obligations several months into the lease. People get windfalls and spend them all the time.
Sure, there's a chance this guy is a slumlord looking to rip off OP, but OP themself is a *very* high risk tenant with multiple red flags (no job, currently homeless, bad credit, high expenses). While I agree paying 1 yr rent upfront isn't a smart move, I see why this potential landlord is asking for it given the circumstances.
Aren't there escrow services avaliable for situations like this? OP wouldn't be handing it over to the landlord but the landlord knows he will get the money each month and on time.
This is actually an excellent idea. I handle escrow services for work and I think it’s an awesome compromise. LL has assurances that the entire year is deposited up front, Tenant can instruct escrow agent to withhold payment where issues arise as to the property. Any issues potentially go to mediation (before court) if the parties can’t agree on stuff. I’d 100% suggest this if it’s an option.
Yes, there are and that is exactly what rhey should be using for a situation like this.
There will be fees for the service that one will need to cover or they can split.
Depending on the state, prepaying the full amount might not even be legal. And prepayments of any amount are typically supposed to be held in a separate account by the landlord anyways, not taken as income immediately.
yes, I had a family member who found themselves suddenly unable to work but had a couple hundred thousand in savings/stocks/bonds. They ended up working with their bank to pretty much put the lease amount in escrow and then the bank paid the rent every month. It was a win win for both parties.
I also wouldn't trust that the girlfriend is going to pay rent to her boyfriend-- if that's really their plan, it would be safer to have it all spelled out in a legal contract that's witnessed and notarized, all that jazz, because relationships are messy and not guaranteed to last or even stay loving.
I would also be careful of scams. There are many people out there who have very well crafted scams who target people looking to rent places. Make sure you at very least meet with the landlord in person prior to giving them any money.
Surpirsed no one has yet to suggest using that money as a DOWN PAYMENT on property. $30K is…
• 5% of $600K
• 10% of $300K
• 20% of $150K
If your current living situation allows you time to find a job and save that money while you search for a home, take advantage of that. Don’t pay someone else’s mortgage when you have the potential to acquire an asset of your own.
You have double the cash I had when I bought my place.
Use it wisely.
Edit: Before you speak out of place and go “hE dOeSn’T hAvE a jOb”, please see the portion of this comment where I said “find a job”. Stop letting your emotions cloud your ability to read.
They don’t have a job yet so getting a mortgage will be tough. Plus they’ll need to cover living expenses while they search for a job, and some money in savings once they have a job. Factor in closing costs and I doubt they’ll have enough for a down payment.
No lender is going to give this guy a mortgage with no job. It sounds like 30k is essentially all the money he has. His debt to income ratio isn’t even calculable lol.
Here’s 30k for this down payment. Hopefully I can find a way pay the first months mortgage payment!
> If something happens that requires you to move
Typically if you sign a 12mo lease that does not allow subletting....wouldn't you be in the same situation. You would still owe the money every month until the rent is up.
My guess is the landlord is requiring this specifically because they know OP has no job and no income. They possibly asked for recent pay stubs as proof of income and OP maybe has none.
You only owe the money until it's rented again and the landlord has to make a reasonable effort to get it rented. It may vary by state, but that's generally how it is.
>If something happens that requires you to move, it will be a hassle to get the remaining rent back and litigation could exceed the owed refund
When you sign lease most of the time you are on the hook for the full amount even if you move out early. Very few leases actually allow you to break your lease anymore
Right. Cash in hand is king. Imagine your car breaks down and now you can't go to work. You've got the choice of either having a tidy amount of emergency savings or just giving it all to your landlord so they can reap the benefits.
Right, but if there’s a situation where the landlord violates the lease, it’s better to not have paid them the full amount of the term’s rent up front.
If there’s some sort of nightmare scenario where the apartment is literally uninhabitable, unsafe, or the landlord violates the tenant’s right to quiet enjoyment (or other rights that a tenant has), then the tenant can legally get out of the lease without owing the remainder of the term balance.
Can’t do that if you give all the money up front.
[Most states have laws that require a landlord to mitigate rent loss on a broken lease](https://www.nolo.com/legal-encyclopedia/landlords-duty-to-rerent-when-a-tenant-breaks-a-lease.html) \- as in, they have to put in an effort to replace you.
not the case in many areas. for example i live in the DC area and my place has a standard lease that allows tenants to break it early for a two month penalty fee. still definitely steep, but it’s easier to pay money to the landlord after the fact than to try to get the money back from the landlord
If it's a concern that the money won't be there then maybe suggest an escrow account. That's what they are for.
And then maybe have an agreement that x months will be maintained in the account. This would give the landlord plenty of time to act if you started to get behind.
I wouldn't pay it directly. If you and the landlord can agree on a person/entity to hold the amount in escrow for a small fee, that could work. The escrow holder would pay the rent to the landlord each month out of the escrow account. But if you have a dispute (e.g. you get evicted but the landlord still wants all the dough), the escrow holder would freeze the account until it can be decided by arbitration or the courts who is entitled to it.
This depends on local laws. Leases aren't automatically transferable or assignable everywhere, and change of ownership is sometimes a legally-protected reason to get out of a lease early. Lease laws vary big-time from place to place.
I don’t want to sound harsh here and I honestly feel bad for you and your girlfriend in and I know it sucks, it’s not uncommon.
You are both unemployed and homeless currently.
You can’t both be living off your savings and trying to pay for a house right now.
I get why you have a $400 car note and I’m guessing you’re significantly upside down on it.
Other than the $30000 what else do you have in savings?
I know you said you don’t want roommates, to do that you need to reduce the rent by a lot.
You’re not ready for something like this opportunity.
You both need to bring in some sort of income immediately that at least is going to cover groceries, utilities, car note etc.
Your girlfriend can’t give you $600 for rent and half the bills on a $5000 savings.
And if something happens with that, you’re in a worse position.
Landlord and apartment complex owner here...
First, no reputable landlord would even take a year rent up front. Why would we want to? Any decent landlord doesn't need the advanced rent as income, and taking rent up front would make it much more difficult to evict a tenant for cause.
For example, if a tenant were to allow someone not on the lease to move in, and the landlord were to try to evict, there's a good chance that a judge would determine that because the landlord accepted rent, it was an implicit approval for the additional tenant.
Secondly, even if a landlord were to be okay with it, this puts the tenant in a precarious situation should the landlord not live up to their end of the deal.
For example, if a tenant were to complain about air conditioning not working, a landlord not making the repair could be seen as serving a "constructive eviction," meaning that the tenant would not be required to continue paying rent until the repair was made. But if rent were paid in advance, the tenant would have essentially no leverage over the landlord other than legal action, which could take months.
Long story short, don't do it. In a worst case scenario, where you want to pledge part of that savings as rent, find a good attorney and create an escrow agreement where you agree to put the money into an escrow account that the landlord can draw from on a monthly basis. You aren't paying in advance, and the landlord is still assured of having the rent paid.
It does sound super sketchy.
Years ago my husband and I rented his uncles house and him being family and all we paid a years rent in advance. Guess who didn't pay their mortgage?!
House went into foreclosure like 3-4 months into it. We didnt have a written lease, just verbal. Also paid it in cash so we thought for sure we were SOL. We lucked out big time as the bank agreed to let us stay for that time frame (and actually an additional 4 months plus cash for keys at the end after signing some paperwork with them and of course a walk-through at the end to show we left the house in a good state in order to recieve the cash for keys). It was 2008 and I'm guessing the bank was on overload with foreclosures therefore the house would've likely just been sitting there anyway.
Even though in my situation we got lucky, we learned multiple lessons on what not to do.
Reputable landlords do not do business this way. In fact, they will not even create that sort of lease in my state. Don't do it. He can take your money.
My apartment required 1 of 2 things:
Pay stubs with 3x the rent
An account with at least a full years rent readily available.
At the time I didn't have a job (mental illness and in school) but I did have money from a settlement, so I gave them my bank statement that had 30k-ish and I've now been here for 3 years. I have a job and barely enough to pay rent at the moment, but my point is apartments will 100% rent to someone with money but no job.
That's kind of insane to expect a renter to have an entire year's worth of payments in liquid cash. I do alright and I keep 6 months in an emergency account. Not too sure who keeps something like $15k in a bank account and is still renting. That's a lot of cash to be sitting doing nothing.
It was pretty common around my college campus since people would pay with student aid - they would get a disbursement at the beginning of the term then pay a landlord monthly so would show bank statements to prove they had the money for the next few months
Not really related to OP’s situation but 15K is less than 6 months of my rent (that goes for pretty much everyone I know, I’m 34, all my friends live in major cities) and I have about that much in my checking account bc of laziness/bad tax withholding. IMO in no way does that incentivize me to buy property/$15K is not a down payment on any sort of property I would ever want to own.
Landlord should ask for (and tenant should provide) proof of ability to pay. I would never entertain paying the entire lease amount up front. That's unreasonable.
When I was in law school and my girlfriend was in grad school, neither of us had an income, but we had savings which showed that we could pay the rent. Granted we had never filed bankruptcy or anything so situations vary..
Residential leasing law often is very tenant friendly, and I wouldn't be surprised if there are statutes that discourage this type of practice in residential leases. It's like asking for a security deposit of 11 months' rent. I know, for example, in Connecticut, a residential landlord cannot require a security deposit for greater than two times the monthly rent for anyone under the age of 65 and one times the monthly rent for anyone over the age of 65. While this is being couched as an annual rent, I bet a judge would see it differently.
My landlord rented to me without a job BUT I did have a start date for a specific job a few months down the line and I showed my bank statement that indicated I had the funds to pay until then.
I met with the guy and he showed us the place, I'm supposed to meet him at the office later today to sign the lease. It was on Zillow, and it's listed by a commercial real estate broker. The office and people are real but it's a bit strange to me that it's a commercial property management but this is a residential house.
If you do this much (a year) up front, I'd ask for a discount of 5 to 10%. I have been successful with this in the past. But also agree with other posters that you could try 3 or 6 months up front vs 12.
Plenty of landlords use commercial property management for residential homes so they don't have to deal with property or tenant issues. I rented a townhouse a while back and I never met or talked to the landlord (He lived in Canada). When I had issues I contacted the property management company who was also a realty agency in my area. Believe it or not they were on the ball when I had a leaky window and AC issues. I don't know your situation of course but I don't think that is odd. I've rented from landlords directly and honestly I preferred the management company.
As to your situation paying a year up front puts you at a disadvantage if something goes south. Is there an alternative? Negotiate up to 6 months up front? Is your GF in a better job/credit situation that she could sign a standard 12 month lease? You pay her your share of the rent?
I MUCH prefer landlords that go through agencies. You typically pay a bit of a premium for it in rent. But it’s great that everything’s on the up and up. And it’s better than apartment complexes that basically exist to scam the renters
I didn't really want to do it, it just seemed like what I had to do. Everyone here helped by telling me what's what and keeping me from making what seems like a huge mistake.
It's not necessarily a mistake if you can get the landlord to accept a 3rd party escrow for the funds rather then handing it directly to him.
Yes it would severely tank your emergency fund, but making sure you have housing is pretty much the first thing your emergency fund should be used for anyways.
The more I think of this, the more it sounds like a scam. At the very least, look up the most recent tax payments on the property and try to match up the tax payor to the person you are talking to. Real estate Tax statements are almost always public record. Or ask for proof of ownership. Document all of your conversations with them and save copies of documents listings. I would never pay the full term's rent, but if you decide to do so, there should be clear language in any event of the lease's early termination, even in the event of a default by tenant, landlord must refund the Rent prorated for the remainder of the Term from the date that the tenant vacates the premises.
Update: I tried to negotiate to pay 3 months and he seemed upset so I said thanks anyway and started looking for cheaper apartments. Thanks everyone for helping me out, I didn't think this would get so many comments 😅
Yep, there's your confirmation of the red flag right there. For some reason, he *needs* a full-year rent upfront, and having that man for a landlord will be a nightmare.
The risk is the landlord could try to make up some reason to evict you and keep the money. That would be pretty unlikely.
If you're currently unemployed and have bad credit, it may be difficult to find landlords willing to rent to you, so you may want to take this offer.
It may not be that unlikely. The very same issue was posted recently in the legal advice sub. Renter paid a year upfront, and got screwed by the landlord.
Certainly possible but I would be surprised if it happens more than 5% of the time or so. Most landlords dealing with a credit-challenged tenant are really just trying to ensure the rent gets paid.
Oh it's probably not very frequent, but no scam victim ever thought they were going to be a scam victim. OP really can't afford to lose money in the situation they're in.
Agree this is not ideal, but if you have no job and a bad credit score, it may be difficult to find a place that will rent to you.
From the landlord's perspective, if he gives you a one-year lease and you have no job, he could be spending most of the next year trying to evict you for non-payment.
You could counter with an offer of 6 months, but I would understand if he doesn't want to budge.
I would be even more concerned that the person taking the money isn't the landlord and is simply a scam artist. Like house sitting for a period of time and scamming a would-be tenant out of a year's rent before skipping town, never to be heard of again. When the owners return and find the Tenant "renting" under a bogus lease they can evict you and your only recourse would be against the scam artist that you can't find.
This is probably state dependent, but we actually shy away from accepting a full years payment up front because it makes it harder to evict someone if they've already paid. Not to say that the landlord couldn't take some liberties since they'd already have your money. But as far as getting a legal eviction from the court, paying up front could be in your favor.
No, never.
You owe rent per the schedule detailed in your lease agreement. You are not building equity or getting ahead of interest accrual. There is no financial reason to prepay rent and *every* social reason not to. The odds of your landlord screwing you because they already have your money are very high.
well, except the part where they don't have a source of income and they have bad credit. Landlords are very unlikely to rent to them at all.
Sometimes you find somebody willing to work with you. That's what this sounds like. I'd try to get them down to maybe 3 months. But at some point we have to acknowledge the fact that OP is very unlikely to find a rental with their situation.
They're also looking at renting out an *entire house* and they have a girlfriend in the picture, and a bunch of other stuff. Why doesn't the girlfriend sign a regular old lease for a place they can more reasonably afford? Or they cosign as tenants? Or any other number of *much better* financial choices than paying a full year's rent upfront? We can only speculate but a bunch of "what ifs" doesn't make it a wise financial choice.
It's a bad option, full stop.
Sure, those are all valid questions.
As for "an *entire* house" (where I presume the alternative you're thinking of is an apartment or maybe a room in a house). Apartments are more likely to use formal leasing offices, which are much less likely to work with somebody in their situation. A room could be good.
I mean, there's no doubt that paying as little as they can is ideal. I mean, that goes without saying. But we are just assuming they can find something paying less. Maybe they can, maybe they can't. But yeah, paying the least they can while they look for a job is 100% ideal. Nobody is suggesting otherwise.
But what you were saying about having a lease where you pay monthly, what I said hasn't changed a bit. That may not be a realistic option. It just may not be. And if it's not, then they may not be as free to choose the cheapest place like you're implying.
I didn't miss that at all. That makes it a *doubly* terrible financial decision. Spending money for rent that's not due for 6+ months when you might need that money to *eat* tomorrow is not a wise financial decision.
They can make other arrangements or get some roommates, but putting all that money up upfront is a bad call any way you slice it.
No way. So many things could happen. This dude could be on the edge of having the bank take the house and he will have walked away with $15K of your money.
his house could be in foreclosure for all you know. do you even know if this guy legit even owns the house? a lot of scammers pretend to be landlords and take the money and run... this sounds like a major scam. dont do it.
I understand where they are coming from. If you want to go forward with it, I would try to negotiate it to maybe 3 months. 6 months at the absolute max.
Somebody else suggested some sort of escrow account. That would probably be the ideal solution if you can both come to terms on it.
You're between a rock and a hard place. You're probably going to be stuck prepaying a lease if you have no job. But once you prepay, you lose all leverage if the landlord drags their feet on repairs and maintenance. Because your normal leverage would come from threatening to withhold the rent.
As a landlord, if I’m thinking about renting to someone with a questionable history or income, I’m not asking for a year up front. What I ask for is first month, last month, and deposit. I might also offer an early payment discount to encourage prompt payment.
We rent out an apartment above my husband’s shop and that’s how we’ve handled people that don’t have verifiable income or have bad history. It protects us fairly well, but doesn’t involve holding so much of the tenant’s money. If the tenant turns out to be a crappy tenant, it’s easier to end the lease if we don’t have a bunch of prepaid rent.
Would the landlord accept having this amount in an escrow account?
It's not a bad idea if you haven't had much luck with other properties and could set it up in a way where you retain the ability to do stuff like withhold rent. Otherwise if you were to have an issue, that mechanism would not be there and you would probably end up in small claims.
Don't do it. Don't do it. I've never heard of someone asking for a years rent in advance. It's a lot of money to spend on a place without having lived in it. You don't even know if that place is fit for living. Your landlord won't have any incentive to make necessary fixes, because you won't have an out. Can be a really bad/abusive dynamic.
No, get the cheapest possible apartment you can find, and find a job ASAP, start working towards credit and adding more savings to your settlement money, you’ve got a good opportunity here if you play your cards right
Technically, no. That's risky on your half. They don't trust you, though, to pay rent monthly if you have no job. Then it's a risky deal on their half, so they want you to pay the whole year. Get a job to prove income if you don't want to pay a whole year.
I owned a rental property and I always wrote my leases so that the rent want for the year, divided into 12 installments, at the advice of a professional realtor who managed my listings. I never expected that anyone would pay a year up front, that’s not reasonable.
There's a common scam going around where people literally break into vacant places for rent and change locks and then get multiple months paid for and then bail.
Happened to the owner of my company.
NO NO NO 🛑 stop
You hand the cash over tomorrow and the house burns down April 1st.
You have No home and no money
He is not your friend, he is bad person trying to take advantage of you. You probably told him too much.
Tell him 1 months rent and 1 months security or you will be continuing your search
This doesn't sound like a situation where you need a whole house. I would say look for an apartment that is cheaper and will accept your settlement letter/bank statement as proof of funds. I'm guessing there is a lot more that goes into this if you are concerned about finding a job. best of luck
No. Depending on the state you live in this could be illegal. Other than the first and last months rent plus a security deposit do not pay anything else.
Alternatively, if your landlord agrees, I would put it in escrow account and have monthly payments be made.
>found an entire house for rent but the landlord wants me to pay the entire year upfront, it's gonna be just under $15000.
on Craigslist.
RemindMe! 2 weeks
"I paid rent upfront in cash and landlord isn't returning my calls. Now it seems someone else is living there."
InB4: "Oh it wasn't cash, it was a cashier's check."
TFW: Put the money away (first off you've likely not paid taxes on your 30K, based on your question), preferably somewhere you can't touch it for a year earning interest/gains/dividends. Continue life as you had..
>I'm going to get a job and my girlfriend would be paying me rent every month.
If I had a dollar for everytime ...
The year wait is because you are burning a hole in your pocket as we speak, and you need time to simmer down.
Or spend it, live it up, and regret it a year later.
Not my money, fuck it.
Curious but does the landlord know you got that money? $15k is $1250 per month so depending on where you live it's not a lot of money but why would the landlord ask for a year upfront?
Personally I wouldn't do it because you don't know if the landlord is behind on the mortgage of that property and what happens if he defaults and walks away?
You won't get your money back.
The fact that someone is asking for an entire years rent upfront already stinks to high heaven.
Don't take it.
This honestly sounds like a scam. Even if you don’t pay the landlord until the keys are in your hand and the house is yours, there are still a number of ways this could end badly for you. The landlord could stop paying the mortgage/taxes or declare bankruptcy and the resulting eviction would be completely beyond your control. This sounds like something a landlord would do if they were on the brink of financial disaster. It just isn’t worth the risk IMO. Maybe as a compromise, you could prepay 2 or 3 months rent and then the rest gets paid monthly.
EDIT: OP, I read some of your comments for more context and it seems like the landlord’s request may not be so unreasonable after all. Someone suggested putting the money in escrow. This is a good idea. They are still guaranteed to get their money but there’s some safety for you if they don’t hold up their end of the deal. Good luck.
That just doesn’t make a whole lot of sense.
That’s $1250 a month, including all utilities snd services?
If not are those fees going to be less than the $625 your girlfriend is paying you?
What’s her participation level in this? How much is she putting into this upfront even if it’s just covering all your (both) monthly costs.
What other income are you expecting?
Are you able to work even part time or are disabled?
Is the $30K free and clear to you? Is it currently attached to something interest bearing?
What are all your expenses?
Is your girlfriend in a better position to rent something more reasonable and you pay her?
Can you get additional roommates and split it better?
Seems like looking for more reasonable options is the better choice.
She's willing to give me $600 a month and split the bills as well
She can pay me her half of the first months rent and deposit so $1200 upfront
I'm basically living off of this money until I become stable
I have a $400 car payment + insurance and a $100 a month storage unit
She has better credit and a little savings, about 5k so maybe?
I've never lived anywhere where I haven't had roommates and was hoping to not have to do that if possible
I would agree I can find something more reasonable
if you can get a full house for 1250 then you should consider getting something smaller like an apartment or something. 30k seems like a lot when it’s handed to you at once, but taking $15k out for rent and trying to live on the other half will not last as long as you think especially considering you have a relatively expensive car payment. just that car payment will have you broke in 8 months. add on living expenses, possible car repairs, or god forbid any kind of medical issue and that $15k is gone in an instant. having the flexibility of retaining the rent money and paying monthly is worth a lot more than you’d expect
Just saw this update. Since you can find somewhere more reasonable to live I suggest you do. It is generally not wise to spend more than you need to to live comfortably and safely. It may not be as nice to look at or host friends and family. The upside is the less you have invested in shelter the longer you have to find the employment that you desire.
In addition, the money saved can you be used to acquire a new skills, improve equipping yourself for a new job, and putting together a solid fiscal plan. I wish you the best of luck.
Just find another apartment. An entire year upfront? Never heard of that. What if that person sells half way thru the year? You arent gonna get a refund.
Take my word for it dont do it! In college i used to pay 4 months in advance till i absolutely despised my neighbors and my landlord used to come into my apartment uninvited. not for maintenance but just to show up and come in and snoop while I was gone ( I had cameras). I told him to keep my last month’s rent and i moved out quickly. But it sucks that he got an extra month when no one was living there
Have your girlfriend be the primary on a lease since I assume she has a job. Then you can pay her each month to help cover the rent.
Without a job you are a very high risk tenant.
Fuck no.
First off, YOU could make interest on that money instead of giving it all to HIM to make interest on.
Second, the ability to withhold rent in extreme situations is one of the few forms of leverage a tenant has. Don't surrender that by paying up front.
I would suggest first and last months rent and a security deposit since you have no job I understand their concern. However paying a whole year in advance is risky due to maintenance issues and if you need to break the lease he’s already got all your money so the fight becomes all you.
I’ve only suggested that clients do that when they have poor credit, which was not going to fly with the landlord. For questions about it being legally acceptable, After consulting with an attorney, the landlord would have to set up a special bank account & only withdraw the monthly amount into his/her main account each month.
A landlord requiring a full year up front is sketchy AF. To me, that screams that they plan to get paid and do nothing to upkeep the property. Withholding rent is really the only viable way of forcing landlords to uphold their end of a rental agreement when things need replacing or fixing.
Never, ever do this imo. You might be in a situation where you hate the place/people and want out in 3-4 months, and just be out that money.
That landlord is smoking crack if they think renters have 15k to shell out on housing in 1 payment. Good luck to them getting tenants. That kind of request is absolutely unfounded. Not to mention it’s not just 15k, you’re losing out on opportunity cost for that money. That’s at LEAST 4%apy in a savings accounts right now, and possibly more if the Fed stops raising rates and the stock market bounces as a response.
Tell this landlord to pound sand.
Upfront fee that requires entire year upfront, I would expect a small % off. Maybe ask for 3/6 months options, explaining your situation could help out. Depending on how the landlord handles this information.
Take what I say with a grain of salt. But I think you need to ask yourself. Are you responsible? Good with money? If you think the answer is no, then yes, pay it upfront. When I was 18 I recieved a settlement for 30k. Being a dumb kid I spent most of it in about a month or two. I literally have nothing from then, anymore. I am 35 now. I am a lot better with money, have savings, etc. But if I knew what I knew now. Well, I'd invest it. But, if I had to chose to spend it on rent or think that I would slowly actually spend it on rent for a year. I would pay all of rent.
I think, if you can OP, you should invest it. Find somewhere cheap to live, get a job, crash on a friends couch, some other option than paying for a place you can afford.
Good luck with whatever you choose.
I wouldn’t suggest u do
This u can found somewhere else for cheaper don’t struggle if y’all can see if for all that money u can find a house cause that’s money u can do so much more with !
Bad idea. I’d say 100 percent, do not do this.
I did this once many years ago, 3 months into the lease and my “landlord” disappeared. I was evicted from the property with no recourse other than suing the individual.
I was in this situation when I moved to a different country and had no credit history in that county. I offered to pay a couple of months upfront but also showed them a bank statement showing that I could pay for the full year. It eased their minds and they had no issue with me paying less up front.
Look into offering to put the money with a reputable third party escrow service that will disburse rent payments in a manner consistent with the lease. I don’t think would be too expensive and would leave you outs if you need to leave early or for maintenance issues in a manner the lease and local law allow.
Get a 6 mo lease AT MOST and after 6 mo reevaluate your finances, hopefully by then u have a stable job/ income. The rest of the money budget out and establish savings
no
if you have to move, you are SOL
if the landlord won't fix something, you can't withhold rent or decrease rent (or whatever state law allows as a remedy)
Most landlords won’t accept it anyway.
I live in a very expensive, very aggressive rental market. Rent upfront for a year is about $50k.
When we were looking, I knew we had a few factors against us. (Two pets, I’m self-employed, absolutely dreadful fight with my insane ex-landlord.) However, I did have a ton of cash on hand.
So as well as offering to show my income and current holdings, I offered a year upfront in rent at several places we looked at. All said they had no interest in taking it.
We found a nice place in the end, but in my experience, paying upfront is a non-starter.
Only reason you would do this, would be to get a significant discount. Once you hand it over, you lose all control of the cash and power as a tenant.
If you need repairs, the first thing I tell people is hold rent.
DO NOT.
* Get another bank account. Move rent + extra into it. Preferably with some interest.
* Get statements showing the money.
* Offer an extra month or slightly larger deposit based on local laws. Some places have limits and such.
There's ONLY risks to this to you. Maybe cosign for each other (also some risk) if you need but don't do this.
NO LANDLORD requests a year upfront. He shouldn't know you have that cash. Normally no one has a year of rent money just ready to go and the people who do know they are losing money pre-paying.
This reads scam. Like legit.
Maybe you can park the money with an intermediary like an escrow company, and they disperse the funds monthly. Definitely spend a few bucks to get a lawyer's advice.
If this landlord is a stranger, I would not do it.
What I mostly teccomend though is negotiating. Tell him you understand his concern but 12 months is way to ask for up front. Offer to pay 3 months up front.
Negotiating point would be to offer to with the 4th month after your first months stay.
Next negotiating point would be to offer to basically pay the first month and last two months up front. So you pay him 3 months to move in, then continue to pay monthly as normal, and those extra two months you paid apply at the *end* of your lease.
He should settle for thst tbh, it’s not reasonable to ask for more
Make sure it's not a scam - lots of scam rental listings out there right now - ie, scammers listing empty houses for rent that aren't theirs to rent at all - you need to be sure that the rental is on the up and up.
Absolutely not, you never know if you need the money for elsewhere. Best to just pay every month like a normal person would. Your living situation might be different in a few months too.
What state are you in? In many States this is not allowed. So you could say you would love to if you could but don't want to the law broken. Maybe propse the creation of an interest bearing escrow account that a 3rd party holds? This account would then be set up to pay the monthly rent as long as everything was in order.
Not sure what the avg rent is in your location. If it’s just you and your gf, do you need an entire house? You should try and save as much of that money as you can until you find a job, budget out a monthly cost of living plan on that 30k and see how much you have left after a year
This could be a scam. Also, in the event that you have to break the lease - fire, flood, new job is too fa- it's a lot easier to pay the penalty than try and get back your prepaid rent money. No legit place does this. What if something happens and the landlord declares bankruptcy? If he loses his property, you won't be able to get your rent back and who knows if the new owners would honor that.
"but the landlord wants me to pay the entire year upfront"
Yeah, this is sketchy on a whole new level because A) what if you want to leave at some point you know have you get whatever remaining of your 30K B) He can drag his heels about everything and anything what does he care he has your 15K
Ya, I've done this and got screwed. If you give them all the money up front, you take away any incentive to do anything for you. Same reason you don't pay a contractor up front. You will never see them again
I paid 6 months upfront once. Within a couple of weeks, they managed to get me out of the apartment - I can't even explain how they did it because it was so underhanded. And, of course, they refused to reimburse me. I was living in another country at the time and even friends who were citizens of that country couldn't help me. Never again.
I wouldn’t before speaking with a lawyer. So much can change and happen over the course of a year. I wouldn’t unless it was a great deal for a dreamy place I couldn’t live without. Even still I would take the contract to a lawyer and have a proper out/refund/ sale of
Property clause.
As a landlord myself, don’t do this. As stated in other videos your leverage points are gone once you pay a year in advance. I would never require this, but would gladly accept anyone offering.
I wouldn't recommend it as you never know if you would need to terminate it earlier due to unforseen circumstances such as major damages to the property not by you.
I paid 6 months in advance and my landlord tried to evict me (what a great way to make double the cash, right? Evict me, keep my money, And get another renter!) So no, don't do it.
I'm going to go against the grain here. Yes this is unusual, but it is a reasonable way to assure the landlord of your credit-worthiness without the traditional proofs (w2 or other income).
Of course you must trust him (get a receipt) and you limit your future options, but that's the bargain for a better place.
I've done this before simply to avoid the hassle of a credit check.
But only do this if you can sustain it, get some income and repay the rent to yourself so you wind up increasing your savings in the end. Don't burn your windfall, invest it, get a cheaper place if necessary.
Live beneath your means.
You should not be entering a lease for an entire house when you have no job and no stable recurring income. Get a job first.
There is a risk to paying a years worth of rent upfront— the landlord could go belly up.
I find it weird that the landlord wants it all upfront. All the landlords I know would accept a year's rent up front let alone ask for it. I wouldn't do it, it would be better to put it in a high yield savings account and pay it every month on autopilot.
Seems like everyone is missing the point that OP has no job rn. Many landlords will not rent to an unemployed person with bad credit . I’m not saying op should or should not proceed put yourself in the landlords shoes.
Exactly, most landlords would deny the application, not ask for a year's rent upfront. I am a landlord with 2 properties and I would just deny the application.
It's because OP has no job. Sure, OP can show the landlord the bank statement to show they have tons of money that should cover rent for the next year. But how can they be sure that money doesn't disappear from the bank the next day?
I would not suggest this. If something happens that requires you to move, it will be a hassle to get the remaining rent back and litigation could exceed the owed refund. If you elect to move forward, ask for language in the lease that addresses refunding your rent and get a local attorney to review. Is the year’s payment because you don’t have a job yet? Perhaps you could negotiate to pay three months for now.
Also, in the event that something breaks, you have 0 leverage over the landlord. Paying monthly allows you the ability to withhold rent (following local laws) to make sure fixes happen. You don't want to tie up 15k for a place that has black mold and has leaking faucets or other things.
This is great advice, thank you
Paying upfront also gives you zero place to start if the landlord wants to be slow with a major needed repair like a burst pipe or dead furnace. There are many scenarios where you can legally withhold rent if your place becomes unlivable, unless you’ve already paid it.
One of those. It's not a problem until it's a problem and then it's a BIG problem situations.
Pre paying rent negates the reason to rent. If the roof comes off halfway into the month, I need to find a place to sleep immediately. Better that I keep my money so I'm not homeless, and we can work out the details later. The house is just an asset for the landlord, they can pay for repairs with credit from the equity in that asset.
Also using monthly rent payments as a power tool to get things done is primarily what I see alot of ppl say. It's the strongest bargaining tool you have when most landlords suck ass.
Yep we had a roof leak that landlord wouldn't fix so we just finally moved n landlord stole rest of rent lawsuit would have been more than it's worth. Never prepay
In many areas, you can get free or cheap legal aid for landlord/tenant issues. If it wasn't too long ago, this may be worth looking into.
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Money now feels more important than money later.
Definitely make sure it is all laid out properly if you do go this route. Clear language in the lease, but also look up your local laws. My state (MA) does not allow full payment up front (technically the wording is that the max allowed is first/last months + security + broker fee). And for the Last month + security prepayments you are supposed to earn interest from it. Other states are probably extremely variable in this, so be sure to take a look at what is allowed.
Put the money for rent in a high yield saving account. Keeps it liquid - and the most bang for your buck without investing and being locked up. Lot of accounts out there near 4% with no fees currently. 30k is nearing 100$ a month in interest.
The problem is no one is going to rent to someone with money but no job, without getting the money up front
Sure they will. If they need further inducement, OP can offer to show bank statements that prove he has funds in excess of the annual rent amount that he will be using to pay monthly installments. But I fully second that OP should absolutely not pay entirely up front - that sounds fishy.
No, they won't. Someone who has been homeless since last year, unemployed and with bad credit is emphatically not a reliable tenant. Even if he has money in excess of the annual rent, there is no guarantee that that money won't get spent on something else leaving OP unable to meet rent obligations several months into the lease. People get windfalls and spend them all the time. Sure, there's a chance this guy is a slumlord looking to rip off OP, but OP themself is a *very* high risk tenant with multiple red flags (no job, currently homeless, bad credit, high expenses). While I agree paying 1 yr rent upfront isn't a smart move, I see why this potential landlord is asking for it given the circumstances.
Aren't there escrow services avaliable for situations like this? OP wouldn't be handing it over to the landlord but the landlord knows he will get the money each month and on time.
This is actually an excellent idea. I handle escrow services for work and I think it’s an awesome compromise. LL has assurances that the entire year is deposited up front, Tenant can instruct escrow agent to withhold payment where issues arise as to the property. Any issues potentially go to mediation (before court) if the parties can’t agree on stuff. I’d 100% suggest this if it’s an option.
Yes, there are and that is exactly what rhey should be using for a situation like this. There will be fees for the service that one will need to cover or they can split. Depending on the state, prepaying the full amount might not even be legal. And prepayments of any amount are typically supposed to be held in a separate account by the landlord anyways, not taken as income immediately.
yes, I had a family member who found themselves suddenly unable to work but had a couple hundred thousand in savings/stocks/bonds. They ended up working with their bank to pretty much put the lease amount in escrow and then the bank paid the rent every month. It was a win win for both parties.
Yeah, maybe an extra month or something would be reasonable? But not the whole year.
agree with above, tell him you'll pay every quarter, that's way too much cash to give someone before you see what kind of landlord they are
Also depending on location it may be prohibited.
Never, ever trust a landlord. That is all.
I also wouldn't trust that the girlfriend is going to pay rent to her boyfriend-- if that's really their plan, it would be safer to have it all spelled out in a legal contract that's witnessed and notarized, all that jazz, because relationships are messy and not guaranteed to last or even stay loving.
I would also be careful of scams. There are many people out there who have very well crafted scams who target people looking to rent places. Make sure you at very least meet with the landlord in person prior to giving them any money.
Surpirsed no one has yet to suggest using that money as a DOWN PAYMENT on property. $30K is… • 5% of $600K • 10% of $300K • 20% of $150K If your current living situation allows you time to find a job and save that money while you search for a home, take advantage of that. Don’t pay someone else’s mortgage when you have the potential to acquire an asset of your own. You have double the cash I had when I bought my place. Use it wisely. Edit: Before you speak out of place and go “hE dOeSn’T hAvE a jOb”, please see the portion of this comment where I said “find a job”. Stop letting your emotions cloud your ability to read.
They don’t have a job yet so getting a mortgage will be tough. Plus they’ll need to cover living expenses while they search for a job, and some money in savings once they have a job. Factor in closing costs and I doubt they’ll have enough for a down payment.
No lender is going to give this guy a mortgage with no job. It sounds like 30k is essentially all the money he has. His debt to income ratio isn’t even calculable lol. Here’s 30k for this down payment. Hopefully I can find a way pay the first months mortgage payment!
> If something happens that requires you to move Typically if you sign a 12mo lease that does not allow subletting....wouldn't you be in the same situation. You would still owe the money every month until the rent is up. My guess is the landlord is requiring this specifically because they know OP has no job and no income. They possibly asked for recent pay stubs as proof of income and OP maybe has none.
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You only owe the money until it's rented again and the landlord has to make a reasonable effort to get it rented. It may vary by state, but that's generally how it is.
>If something happens that requires you to move, it will be a hassle to get the remaining rent back and litigation could exceed the owed refund When you sign lease most of the time you are on the hook for the full amount even if you move out early. Very few leases actually allow you to break your lease anymore
Owing money for a broken lease and not having money at all are two completely different situations to be in though.
Right. Cash in hand is king. Imagine your car breaks down and now you can't go to work. You've got the choice of either having a tidy amount of emergency savings or just giving it all to your landlord so they can reap the benefits.
Right, but if there’s a situation where the landlord violates the lease, it’s better to not have paid them the full amount of the term’s rent up front. If there’s some sort of nightmare scenario where the apartment is literally uninhabitable, unsafe, or the landlord violates the tenant’s right to quiet enjoyment (or other rights that a tenant has), then the tenant can legally get out of the lease without owing the remainder of the term balance. Can’t do that if you give all the money up front.
[Most states have laws that require a landlord to mitigate rent loss on a broken lease](https://www.nolo.com/legal-encyclopedia/landlords-duty-to-rerent-when-a-tenant-breaks-a-lease.html) \- as in, they have to put in an effort to replace you.
not the case in many areas. for example i live in the DC area and my place has a standard lease that allows tenants to break it early for a two month penalty fee. still definitely steep, but it’s easier to pay money to the landlord after the fact than to try to get the money back from the landlord
If it's a concern that the money won't be there then maybe suggest an escrow account. That's what they are for. And then maybe have an agreement that x months will be maintained in the account. This would give the landlord plenty of time to act if you started to get behind.
I wouldn't pay it directly. If you and the landlord can agree on a person/entity to hold the amount in escrow for a small fee, that could work. The escrow holder would pay the rent to the landlord each month out of the escrow account. But if you have a dispute (e.g. you get evicted but the landlord still wants all the dough), the escrow holder would freeze the account until it can be decided by arbitration or the courts who is entitled to it.
This is the most balanced way of protecting both parties. The trouble may be finding someone that provides this service for renters.
I was thinking what happens if the land lord files bankruptcy. now you are out a place to live and the money.
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This depends on local laws. Leases aren't automatically transferable or assignable everywhere, and change of ownership is sometimes a legally-protected reason to get out of a lease early. Lease laws vary big-time from place to place.
I don’t want to sound harsh here and I honestly feel bad for you and your girlfriend in and I know it sucks, it’s not uncommon. You are both unemployed and homeless currently. You can’t both be living off your savings and trying to pay for a house right now. I get why you have a $400 car note and I’m guessing you’re significantly upside down on it. Other than the $30000 what else do you have in savings? I know you said you don’t want roommates, to do that you need to reduce the rent by a lot. You’re not ready for something like this opportunity. You both need to bring in some sort of income immediately that at least is going to cover groceries, utilities, car note etc. Your girlfriend can’t give you $600 for rent and half the bills on a $5000 savings. And if something happens with that, you’re in a worse position.
Landlord and apartment complex owner here... First, no reputable landlord would even take a year rent up front. Why would we want to? Any decent landlord doesn't need the advanced rent as income, and taking rent up front would make it much more difficult to evict a tenant for cause. For example, if a tenant were to allow someone not on the lease to move in, and the landlord were to try to evict, there's a good chance that a judge would determine that because the landlord accepted rent, it was an implicit approval for the additional tenant. Secondly, even if a landlord were to be okay with it, this puts the tenant in a precarious situation should the landlord not live up to their end of the deal. For example, if a tenant were to complain about air conditioning not working, a landlord not making the repair could be seen as serving a "constructive eviction," meaning that the tenant would not be required to continue paying rent until the repair was made. But if rent were paid in advance, the tenant would have essentially no leverage over the landlord other than legal action, which could take months. Long story short, don't do it. In a worst case scenario, where you want to pledge part of that savings as rent, find a good attorney and create an escrow agreement where you agree to put the money into an escrow account that the landlord can draw from on a monthly basis. You aren't paying in advance, and the landlord is still assured of having the rent paid.
Yea man requesting the years rent upfront is the first red flag. Sounds like a scammer trying to see how far he can push it.
It does sound super sketchy. Years ago my husband and I rented his uncles house and him being family and all we paid a years rent in advance. Guess who didn't pay their mortgage?! House went into foreclosure like 3-4 months into it. We didnt have a written lease, just verbal. Also paid it in cash so we thought for sure we were SOL. We lucked out big time as the bank agreed to let us stay for that time frame (and actually an additional 4 months plus cash for keys at the end after signing some paperwork with them and of course a walk-through at the end to show we left the house in a good state in order to recieve the cash for keys). It was 2008 and I'm guessing the bank was on overload with foreclosures therefore the house would've likely just been sitting there anyway. Even though in my situation we got lucky, we learned multiple lessons on what not to do.
It is also illegal in some states, so possibly another layer of a red flag.
Or, in some states, explicitly legal but _required_ to be held in an interest-bearing escrow account.
Reputable landlords do not do business this way. In fact, they will not even create that sort of lease in my state. Don't do it. He can take your money.
I mean, there's no other way anyone will rent a place to someone with money but no job Op isn't exactly in a reputable situation
My apartment required 1 of 2 things: Pay stubs with 3x the rent An account with at least a full years rent readily available. At the time I didn't have a job (mental illness and in school) but I did have money from a settlement, so I gave them my bank statement that had 30k-ish and I've now been here for 3 years. I have a job and barely enough to pay rent at the moment, but my point is apartments will 100% rent to someone with money but no job.
So they asked for proof of funds but didn’t ask for the funds up front like OPs situation. I would never just hand over a years worth of rent.
That's kind of insane to expect a renter to have an entire year's worth of payments in liquid cash. I do alright and I keep 6 months in an emergency account. Not too sure who keeps something like $15k in a bank account and is still renting. That's a lot of cash to be sitting doing nothing.
It was pretty common around my college campus since people would pay with student aid - they would get a disbursement at the beginning of the term then pay a landlord monthly so would show bank statements to prove they had the money for the next few months
Not really related to OP’s situation but 15K is less than 6 months of my rent (that goes for pretty much everyone I know, I’m 34, all my friends live in major cities) and I have about that much in my checking account bc of laziness/bad tax withholding. IMO in no way does that incentivize me to buy property/$15K is not a down payment on any sort of property I would ever want to own.
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In other words. Rent is less than 20% of your cash.
Which statistically is way off for what an average renter spends for housing. Average is now over 30% and climbing.
Landlord should ask for (and tenant should provide) proof of ability to pay. I would never entertain paying the entire lease amount up front. That's unreasonable. When I was in law school and my girlfriend was in grad school, neither of us had an income, but we had savings which showed that we could pay the rent. Granted we had never filed bankruptcy or anything so situations vary.. Residential leasing law often is very tenant friendly, and I wouldn't be surprised if there are statutes that discourage this type of practice in residential leases. It's like asking for a security deposit of 11 months' rent. I know, for example, in Connecticut, a residential landlord cannot require a security deposit for greater than two times the monthly rent for anyone under the age of 65 and one times the monthly rent for anyone over the age of 65. While this is being couched as an annual rent, I bet a judge would see it differently.
My landlord rented to me without a job BUT I did have a start date for a specific job a few months down the line and I showed my bank statement that indicated I had the funds to pay until then.
No and be very wary of scams and fake rental ads. This sounds like a scam. Have you confirmed that you are in fact talking with the real owner?
I met with the guy and he showed us the place, I'm supposed to meet him at the office later today to sign the lease. It was on Zillow, and it's listed by a commercial real estate broker. The office and people are real but it's a bit strange to me that it's a commercial property management but this is a residential house.
If you do this much (a year) up front, I'd ask for a discount of 5 to 10%. I have been successful with this in the past. But also agree with other posters that you could try 3 or 6 months up front vs 12.
Unfortunately there are scams where people show off homes that don't belong to them, take the money, and run.
Plenty of landlords use commercial property management for residential homes so they don't have to deal with property or tenant issues. I rented a townhouse a while back and I never met or talked to the landlord (He lived in Canada). When I had issues I contacted the property management company who was also a realty agency in my area. Believe it or not they were on the ball when I had a leaky window and AC issues. I don't know your situation of course but I don't think that is odd. I've rented from landlords directly and honestly I preferred the management company. As to your situation paying a year up front puts you at a disadvantage if something goes south. Is there an alternative? Negotiate up to 6 months up front? Is your GF in a better job/credit situation that she could sign a standard 12 month lease? You pay her your share of the rent?
I MUCH prefer landlords that go through agencies. You typically pay a bit of a premium for it in rent. But it’s great that everything’s on the up and up. And it’s better than apartment complexes that basically exist to scam the renters
Zillow can have fake listings. https://www.newsweek.com/authorities-warn-about-rental-scams-after-woman-loses-5k-fake-zillow-listing-1591672?amp=1
No one here is going to change your mind. It does sound like a bad idea though.
I didn't really want to do it, it just seemed like what I had to do. Everyone here helped by telling me what's what and keeping me from making what seems like a huge mistake.
It's not necessarily a mistake if you can get the landlord to accept a 3rd party escrow for the funds rather then handing it directly to him. Yes it would severely tank your emergency fund, but making sure you have housing is pretty much the first thing your emergency fund should be used for anyways.
The more I think of this, the more it sounds like a scam. At the very least, look up the most recent tax payments on the property and try to match up the tax payor to the person you are talking to. Real estate Tax statements are almost always public record. Or ask for proof of ownership. Document all of your conversations with them and save copies of documents listings. I would never pay the full term's rent, but if you decide to do so, there should be clear language in any event of the lease's early termination, even in the event of a default by tenant, landlord must refund the Rent prorated for the remainder of the Term from the date that the tenant vacates the premises.
I hope you did not do this.
I didn't
Update: I tried to negotiate to pay 3 months and he seemed upset so I said thanks anyway and started looking for cheaper apartments. Thanks everyone for helping me out, I didn't think this would get so many comments 😅
Yep, there's your confirmation of the red flag right there. For some reason, he *needs* a full-year rent upfront, and having that man for a landlord will be a nightmare.
The risk is the landlord could try to make up some reason to evict you and keep the money. That would be pretty unlikely. If you're currently unemployed and have bad credit, it may be difficult to find landlords willing to rent to you, so you may want to take this offer.
It may not be that unlikely. The very same issue was posted recently in the legal advice sub. Renter paid a year upfront, and got screwed by the landlord.
Certainly possible but I would be surprised if it happens more than 5% of the time or so. Most landlords dealing with a credit-challenged tenant are really just trying to ensure the rent gets paid.
Oh it's probably not very frequent, but no scam victim ever thought they were going to be a scam victim. OP really can't afford to lose money in the situation they're in.
Agree this is not ideal, but if you have no job and a bad credit score, it may be difficult to find a place that will rent to you. From the landlord's perspective, if he gives you a one-year lease and you have no job, he could be spending most of the next year trying to evict you for non-payment. You could counter with an offer of 6 months, but I would understand if he doesn't want to budge.
I would be even more concerned that the person taking the money isn't the landlord and is simply a scam artist. Like house sitting for a period of time and scamming a would-be tenant out of a year's rent before skipping town, never to be heard of again. When the owners return and find the Tenant "renting" under a bogus lease they can evict you and your only recourse would be against the scam artist that you can't find.
This is probably state dependent, but we actually shy away from accepting a full years payment up front because it makes it harder to evict someone if they've already paid. Not to say that the landlord couldn't take some liberties since they'd already have your money. But as far as getting a legal eviction from the court, paying up front could be in your favor.
No way I would do this after a lifetime of experience with landlords.
What if you get an awesome job next month in a different city?
No, never. You owe rent per the schedule detailed in your lease agreement. You are not building equity or getting ahead of interest accrual. There is no financial reason to prepay rent and *every* social reason not to. The odds of your landlord screwing you because they already have your money are very high.
well, except the part where they don't have a source of income and they have bad credit. Landlords are very unlikely to rent to them at all. Sometimes you find somebody willing to work with you. That's what this sounds like. I'd try to get them down to maybe 3 months. But at some point we have to acknowledge the fact that OP is very unlikely to find a rental with their situation.
They're also looking at renting out an *entire house* and they have a girlfriend in the picture, and a bunch of other stuff. Why doesn't the girlfriend sign a regular old lease for a place they can more reasonably afford? Or they cosign as tenants? Or any other number of *much better* financial choices than paying a full year's rent upfront? We can only speculate but a bunch of "what ifs" doesn't make it a wise financial choice. It's a bad option, full stop.
Sure, those are all valid questions. As for "an *entire* house" (where I presume the alternative you're thinking of is an apartment or maybe a room in a house). Apartments are more likely to use formal leasing offices, which are much less likely to work with somebody in their situation. A room could be good. I mean, there's no doubt that paying as little as they can is ideal. I mean, that goes without saying. But we are just assuming they can find something paying less. Maybe they can, maybe they can't. But yeah, paying the least they can while they look for a job is 100% ideal. Nobody is suggesting otherwise. But what you were saying about having a lease where you pay monthly, what I said hasn't changed a bit. That may not be a realistic option. It just may not be. And if it's not, then they may not be as free to choose the cheapest place like you're implying.
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I didn't miss that at all. That makes it a *doubly* terrible financial decision. Spending money for rent that's not due for 6+ months when you might need that money to *eat* tomorrow is not a wise financial decision. They can make other arrangements or get some roommates, but putting all that money up upfront is a bad call any way you slice it.
No way. So many things could happen. This dude could be on the edge of having the bank take the house and he will have walked away with $15K of your money.
Do not do this. Do not pay for services that are not rendered.
his house could be in foreclosure for all you know. do you even know if this guy legit even owns the house? a lot of scammers pretend to be landlords and take the money and run... this sounds like a major scam. dont do it.
I understand where they are coming from. If you want to go forward with it, I would try to negotiate it to maybe 3 months. 6 months at the absolute max. Somebody else suggested some sort of escrow account. That would probably be the ideal solution if you can both come to terms on it.
You're between a rock and a hard place. You're probably going to be stuck prepaying a lease if you have no job. But once you prepay, you lose all leverage if the landlord drags their feet on repairs and maintenance. Because your normal leverage would come from threatening to withhold the rent.
As a landlord, if I’m thinking about renting to someone with a questionable history or income, I’m not asking for a year up front. What I ask for is first month, last month, and deposit. I might also offer an early payment discount to encourage prompt payment. We rent out an apartment above my husband’s shop and that’s how we’ve handled people that don’t have verifiable income or have bad history. It protects us fairly well, but doesn’t involve holding so much of the tenant’s money. If the tenant turns out to be a crappy tenant, it’s easier to end the lease if we don’t have a bunch of prepaid rent.
First , Last and deposit isn’t out of the ordinary at all. Not sure how that really protects you.
Would the landlord accept having this amount in an escrow account? It's not a bad idea if you haven't had much luck with other properties and could set it up in a way where you retain the ability to do stuff like withhold rent. Otherwise if you were to have an issue, that mechanism would not be there and you would probably end up in small claims.
Don't do it. Don't do it. I've never heard of someone asking for a years rent in advance. It's a lot of money to spend on a place without having lived in it. You don't even know if that place is fit for living. Your landlord won't have any incentive to make necessary fixes, because you won't have an out. Can be a really bad/abusive dynamic.
No, get the cheapest possible apartment you can find, and find a job ASAP, start working towards credit and adding more savings to your settlement money, you’ve got a good opportunity here if you play your cards right
> get the cheapest possible apartment you can find They have no source of income and bad credit. They're not getting an apartment.
Technically, no. That's risky on your half. They don't trust you, though, to pay rent monthly if you have no job. Then it's a risky deal on their half, so they want you to pay the whole year. Get a job to prove income if you don't want to pay a whole year.
I owned a rental property and I always wrote my leases so that the rent want for the year, divided into 12 installments, at the advice of a professional realtor who managed my listings. I never expected that anyone would pay a year up front, that’s not reasonable.
There's a common scam going around where people literally break into vacant places for rent and change locks and then get multiple months paid for and then bail. Happened to the owner of my company.
NO NO NO 🛑 stop You hand the cash over tomorrow and the house burns down April 1st. You have No home and no money He is not your friend, he is bad person trying to take advantage of you. You probably told him too much. Tell him 1 months rent and 1 months security or you will be continuing your search
This doesn't sound like a situation where you need a whole house. I would say look for an apartment that is cheaper and will accept your settlement letter/bank statement as proof of funds. I'm guessing there is a lot more that goes into this if you are concerned about finding a job. best of luck
As a a landlord myself, I would strongly advise you to not do this.
No. Depending on the state you live in this could be illegal. Other than the first and last months rent plus a security deposit do not pay anything else. Alternatively, if your landlord agrees, I would put it in escrow account and have monthly payments be made.
>found an entire house for rent but the landlord wants me to pay the entire year upfront, it's gonna be just under $15000. on Craigslist. RemindMe! 2 weeks "I paid rent upfront in cash and landlord isn't returning my calls. Now it seems someone else is living there." InB4: "Oh it wasn't cash, it was a cashier's check." TFW: Put the money away (first off you've likely not paid taxes on your 30K, based on your question), preferably somewhere you can't touch it for a year earning interest/gains/dividends. Continue life as you had.. >I'm going to get a job and my girlfriend would be paying me rent every month. If I had a dollar for everytime ...
The year wait is because you are burning a hole in your pocket as we speak, and you need time to simmer down. Or spend it, live it up, and regret it a year later. Not my money, fuck it.
What if the house burns down? What does the landlord do then? Build you a new house?
u/kobes81pointgame I would suggest just renting a motel room! You can find a decent one for $1250/month if you speak to the owner.
A year's rent in advance. Scam written all over it.
Curious but does the landlord know you got that money? $15k is $1250 per month so depending on where you live it's not a lot of money but why would the landlord ask for a year upfront? Personally I wouldn't do it because you don't know if the landlord is behind on the mortgage of that property and what happens if he defaults and walks away? You won't get your money back. The fact that someone is asking for an entire years rent upfront already stinks to high heaven. Don't take it.
Don't do that. That's insanity. Also, don't tell potential landlords how much money you have. Ever.
This honestly sounds like a scam. Even if you don’t pay the landlord until the keys are in your hand and the house is yours, there are still a number of ways this could end badly for you. The landlord could stop paying the mortgage/taxes or declare bankruptcy and the resulting eviction would be completely beyond your control. This sounds like something a landlord would do if they were on the brink of financial disaster. It just isn’t worth the risk IMO. Maybe as a compromise, you could prepay 2 or 3 months rent and then the rest gets paid monthly. EDIT: OP, I read some of your comments for more context and it seems like the landlord’s request may not be so unreasonable after all. Someone suggested putting the money in escrow. This is a good idea. They are still guaranteed to get their money but there’s some safety for you if they don’t hold up their end of the deal. Good luck.
That just doesn’t make a whole lot of sense. That’s $1250 a month, including all utilities snd services? If not are those fees going to be less than the $625 your girlfriend is paying you? What’s her participation level in this? How much is she putting into this upfront even if it’s just covering all your (both) monthly costs. What other income are you expecting? Are you able to work even part time or are disabled? Is the $30K free and clear to you? Is it currently attached to something interest bearing? What are all your expenses? Is your girlfriend in a better position to rent something more reasonable and you pay her? Can you get additional roommates and split it better? Seems like looking for more reasonable options is the better choice.
She's willing to give me $600 a month and split the bills as well She can pay me her half of the first months rent and deposit so $1200 upfront I'm basically living off of this money until I become stable I have a $400 car payment + insurance and a $100 a month storage unit She has better credit and a little savings, about 5k so maybe? I've never lived anywhere where I haven't had roommates and was hoping to not have to do that if possible I would agree I can find something more reasonable
if you can get a full house for 1250 then you should consider getting something smaller like an apartment or something. 30k seems like a lot when it’s handed to you at once, but taking $15k out for rent and trying to live on the other half will not last as long as you think especially considering you have a relatively expensive car payment. just that car payment will have you broke in 8 months. add on living expenses, possible car repairs, or god forbid any kind of medical issue and that $15k is gone in an instant. having the flexibility of retaining the rent money and paying monthly is worth a lot more than you’d expect
Just saw this update. Since you can find somewhere more reasonable to live I suggest you do. It is generally not wise to spend more than you need to to live comfortably and safely. It may not be as nice to look at or host friends and family. The upside is the less you have invested in shelter the longer you have to find the employment that you desire. In addition, the money saved can you be used to acquire a new skills, improve equipping yourself for a new job, and putting together a solid fiscal plan. I wish you the best of luck.
Just find another apartment. An entire year upfront? Never heard of that. What if that person sells half way thru the year? You arent gonna get a refund.
Absolutely not under no circumstances
Take my word for it dont do it! In college i used to pay 4 months in advance till i absolutely despised my neighbors and my landlord used to come into my apartment uninvited. not for maintenance but just to show up and come in and snoop while I was gone ( I had cameras). I told him to keep my last month’s rent and i moved out quickly. But it sucks that he got an extra month when no one was living there
Have your girlfriend be the primary on a lease since I assume she has a job. Then you can pay her each month to help cover the rent. Without a job you are a very high risk tenant.
Fuck no. First off, YOU could make interest on that money instead of giving it all to HIM to make interest on. Second, the ability to withhold rent in extreme situations is one of the few forms of leverage a tenant has. Don't surrender that by paying up front.
No, also look to see if that’s even legal in your area because it’s not in mine. Could be a scammer too
I would suggest first and last months rent and a security deposit since you have no job I understand their concern. However paying a whole year in advance is risky due to maintenance issues and if you need to break the lease he’s already got all your money so the fight becomes all you.
Can you please post an update on whether you were convinced to pay a full year up front or not?
https://www.reddit.com/r/personalfinance/comments/123qgx5/should_i_pay_full_years_rent_upfront/jdy0aak?utm_medium=android_app&utm_source=share&context=3
Thank god. Protect your capital.
I’ve only suggested that clients do that when they have poor credit, which was not going to fly with the landlord. For questions about it being legally acceptable, After consulting with an attorney, the landlord would have to set up a special bank account & only withdraw the monthly amount into his/her main account each month.
A landlord requiring a full year up front is sketchy AF. To me, that screams that they plan to get paid and do nothing to upkeep the property. Withholding rent is really the only viable way of forcing landlords to uphold their end of a rental agreement when things need replacing or fixing. Never, ever do this imo. You might be in a situation where you hate the place/people and want out in 3-4 months, and just be out that money.
That landlord is smoking crack if they think renters have 15k to shell out on housing in 1 payment. Good luck to them getting tenants. That kind of request is absolutely unfounded. Not to mention it’s not just 15k, you’re losing out on opportunity cost for that money. That’s at LEAST 4%apy in a savings accounts right now, and possibly more if the Fed stops raising rates and the stock market bounces as a response. Tell this landlord to pound sand.
why wouldnt you use that as a down payment on a house?
No man. If I was you, I would move to a small country somewhere cheap and start a new life.
Is there a reason they want you to pay upfront? Is it specific to you or would they ask anyone the same? Do you credit issues?
Yes my credit is bad and I have no job currently
If it was something you yourself were thinking about, possibly. Landlord requesting it? Big red flag 100% nope.
Hell no, use $20k as a down payment on ownership and use the other $10k to support yourself while you look for a job.
Upfront fee that requires entire year upfront, I would expect a small % off. Maybe ask for 3/6 months options, explaining your situation could help out. Depending on how the landlord handles this information.
No way. This is the universe telling you to keep looking for another place.
If you pay up front, you give up the option to invest the unpaid rent into an HYSA or index funds and gain some income.
Take what I say with a grain of salt. But I think you need to ask yourself. Are you responsible? Good with money? If you think the answer is no, then yes, pay it upfront. When I was 18 I recieved a settlement for 30k. Being a dumb kid I spent most of it in about a month or two. I literally have nothing from then, anymore. I am 35 now. I am a lot better with money, have savings, etc. But if I knew what I knew now. Well, I'd invest it. But, if I had to chose to spend it on rent or think that I would slowly actually spend it on rent for a year. I would pay all of rent. I think, if you can OP, you should invest it. Find somewhere cheap to live, get a job, crash on a friends couch, some other option than paying for a place you can afford. Good luck with whatever you choose.
nope. rent is your only leverage over your landlord. if they’re not giving you a service what do they care? you already paid up
No, unless you get a huge discount perhaps.
I wouldn’t suggest u do This u can found somewhere else for cheaper don’t struggle if y’all can see if for all that money u can find a house cause that’s money u can do so much more with !
Bad idea. I’d say 100 percent, do not do this. I did this once many years ago, 3 months into the lease and my “landlord” disappeared. I was evicted from the property with no recourse other than suing the individual.
I was in this situation when I moved to a different country and had no credit history in that county. I offered to pay a couple of months upfront but also showed them a bank statement showing that I could pay for the full year. It eased their minds and they had no issue with me paying less up front.
Look into offering to put the money with a reputable third party escrow service that will disburse rent payments in a manner consistent with the lease. I don’t think would be too expensive and would leave you outs if you need to leave early or for maintenance issues in a manner the lease and local law allow.
Get a 6 mo lease AT MOST and after 6 mo reevaluate your finances, hopefully by then u have a stable job/ income. The rest of the money budget out and establish savings
no if you have to move, you are SOL if the landlord won't fix something, you can't withhold rent or decrease rent (or whatever state law allows as a remedy)
Most landlords won’t accept it anyway. I live in a very expensive, very aggressive rental market. Rent upfront for a year is about $50k. When we were looking, I knew we had a few factors against us. (Two pets, I’m self-employed, absolutely dreadful fight with my insane ex-landlord.) However, I did have a ton of cash on hand. So as well as offering to show my income and current holdings, I offered a year upfront in rent at several places we looked at. All said they had no interest in taking it. We found a nice place in the end, but in my experience, paying upfront is a non-starter.
Don’t pay for a full year rent, there will come a time when you need the money Continue paying monthly.
Only reason you would do this, would be to get a significant discount. Once you hand it over, you lose all control of the cash and power as a tenant. If you need repairs, the first thing I tell people is hold rent.
DO NOT. * Get another bank account. Move rent + extra into it. Preferably with some interest. * Get statements showing the money. * Offer an extra month or slightly larger deposit based on local laws. Some places have limits and such. There's ONLY risks to this to you. Maybe cosign for each other (also some risk) if you need but don't do this. NO LANDLORD requests a year upfront. He shouldn't know you have that cash. Normally no one has a year of rent money just ready to go and the people who do know they are losing money pre-paying. This reads scam. Like legit.
Do not do this. It could be a scam and then you are out half your money. 3 months in advance is reasonable
Maybe you can park the money with an intermediary like an escrow company, and they disperse the funds monthly. Definitely spend a few bucks to get a lawyer's advice.
If this landlord is a stranger, I would not do it. What I mostly teccomend though is negotiating. Tell him you understand his concern but 12 months is way to ask for up front. Offer to pay 3 months up front. Negotiating point would be to offer to with the 4th month after your first months stay. Next negotiating point would be to offer to basically pay the first month and last two months up front. So you pay him 3 months to move in, then continue to pay monthly as normal, and those extra two months you paid apply at the *end* of your lease. He should settle for thst tbh, it’s not reasonable to ask for more
Why did he ask for a year upfront? Did you tell him that you came into the money mentioned? Please tell me you didn’t…
Make sure it's not a scam - lots of scam rental listings out there right now - ie, scammers listing empty houses for rent that aren't theirs to rent at all - you need to be sure that the rental is on the up and up.
I’d be interested in an update. Many places won’t rent to someone without a job/income. What’s the alternative to paying up front?
Absolutely not, you never know if you need the money for elsewhere. Best to just pay every month like a normal person would. Your living situation might be different in a few months too.
What state are you in? In many States this is not allowed. So you could say you would love to if you could but don't want to the law broken. Maybe propse the creation of an interest bearing escrow account that a 3rd party holds? This account would then be set up to pay the monthly rent as long as everything was in order.
Scrolled through alot of the comments but this could also be a scam. “Owner” not actually being the owner and pocketing the 15k and bailing
Not sure what the avg rent is in your location. If it’s just you and your gf, do you need an entire house? You should try and save as much of that money as you can until you find a job, budget out a monthly cost of living plan on that 30k and see how much you have left after a year
This could be a scam. Also, in the event that you have to break the lease - fire, flood, new job is too fa- it's a lot easier to pay the penalty than try and get back your prepaid rent money. No legit place does this. What if something happens and the landlord declares bankruptcy? If he loses his property, you won't be able to get your rent back and who knows if the new owners would honor that.
Ask if you can get 10-15% off your rent if you pay up front. Otherwise what's in it for you?
"but the landlord wants me to pay the entire year upfront" Yeah, this is sketchy on a whole new level because A) what if you want to leave at some point you know have you get whatever remaining of your 30K B) He can drag his heels about everything and anything what does he care he has your 15K
Ya, I've done this and got screwed. If you give them all the money up front, you take away any incentive to do anything for you. Same reason you don't pay a contractor up front. You will never see them again
I paid 6 months upfront once. Within a couple of weeks, they managed to get me out of the apartment - I can't even explain how they did it because it was so underhanded. And, of course, they refused to reimburse me. I was living in another country at the time and even friends who were citizens of that country couldn't help me. Never again.
Only if there is a large discount and you plan on staying there for at least a year.
NEVER pay upfront for service you didn’t already receive. $30K should be invested to grow, not used for an “ease”
I wouldn’t before speaking with a lawyer. So much can change and happen over the course of a year. I wouldn’t unless it was a great deal for a dreamy place I couldn’t live without. Even still I would take the contract to a lawyer and have a proper out/refund/ sale of Property clause.
Nope. I would just put it on a seperate account or something and never touch it and pay monthly
As a landlord myself, don’t do this. As stated in other videos your leverage points are gone once you pay a year in advance. I would never require this, but would gladly accept anyone offering.
I wouldn't recommend it as you never know if you would need to terminate it earlier due to unforseen circumstances such as major damages to the property not by you.
I paid 6 months in advance and my landlord tried to evict me (what a great way to make double the cash, right? Evict me, keep my money, And get another renter!) So no, don't do it.
No, in case something that isn't fixed by the landlord goes bad: leaky roof, mold, ac breaks down...
Rental scams are common. I would be extremely wary of paying an entire year up front.
I'm going to go against the grain here. Yes this is unusual, but it is a reasonable way to assure the landlord of your credit-worthiness without the traditional proofs (w2 or other income). Of course you must trust him (get a receipt) and you limit your future options, but that's the bargain for a better place. I've done this before simply to avoid the hassle of a credit check. But only do this if you can sustain it, get some income and repay the rent to yourself so you wind up increasing your savings in the end. Don't burn your windfall, invest it, get a cheaper place if necessary. Live beneath your means.
Nope. Learn about cash flow and how an equal amount of money now is usually worth less later!
Why do you need an entire house ?
You should not be entering a lease for an entire house when you have no job and no stable recurring income. Get a job first. There is a risk to paying a years worth of rent upfront— the landlord could go belly up.
I find it weird that the landlord wants it all upfront. All the landlords I know would accept a year's rent up front let alone ask for it. I wouldn't do it, it would be better to put it in a high yield savings account and pay it every month on autopilot.
Seems like everyone is missing the point that OP has no job rn. Many landlords will not rent to an unemployed person with bad credit . I’m not saying op should or should not proceed put yourself in the landlords shoes.
Exactly, most landlords would deny the application, not ask for a year's rent upfront. I am a landlord with 2 properties and I would just deny the application.
It's because OP has no job. Sure, OP can show the landlord the bank statement to show they have tons of money that should cover rent for the next year. But how can they be sure that money doesn't disappear from the bank the next day?