Is Paying Rent in Advance a Good Idea?
In some instances a landlord might offer, or you might propose, paying rent in advance. This could be done to secure a particular property that is on the rental market, or to get a discount on rent.
Paying in advance could be a good idea depending on the circumstances, but be sure you know what you’re getting into — especially if you’re paying a significant amount like a full year’s rent upfront.
Paying ahead to secure a unit
If you are vying to rent a particular property and you believe the competition is fierce, you might think offering to pay a large amount of rent upfront could help seal the deal. Or the landlord might encourage you to do this to get the place. It could be a good idea if the rental is a great place for you at the right price. However, you do want to be careful of a few issues.
First, as with any rental property, watch out for fraud. Sometimes scammers try to rent a property they don’t own. It might be done fully online, or they might meet you at the property, gain access somehow, pretend they’re the landlord, and take your security deposit. They could also push you into providing upfront rent for the place to secure it. Unfortunately, if they are a fraudster, you’ll never see a dime of your money again.
To protect yourself, research the landlord and the property, and talk to a real estate agent about any concerns. Go meet the landlord at their office if possible, never wire money, and watch out if the deal seems too good to be true.
Even if the landlord is reputable, if they ask for extra rent upfront, try to verify that they’re not going into foreclosure. If they do lose the property, you’re pretty well protected under many states’ laws if you’ve paid rent.
Paying ahead to get discounted rent
If you are already living in the property and the option comes up to pay advance rent, it should come with a sweetener like reduced rent or some other benefit to you. You are taking a risk by paying upfront. What if the place burns down, or there is a flood, or you have to move out? Do you want to fight with a landlord over getting your money returned? It’s not worth it in most cases.
Sometimes it may make sense if there is a benefit sweetener to you. You’ll have to determine whether or not it is the right incentive for you to jump on it. A 10-percent discount might make paying a full year in advance a good option, but only if you are sure the landlord is stable and you’ll be able to get your full year of residency. A smaller discount might not be worth the risk.
Overall, these pay-in-advance options are infrequently available, but if one comes up and it’s a good arrangement with low risk, it might be to your benefit to open up that checkbook and make the deal.
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Note: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinion or position of Zillow.