Pitfalls of Renting a Home or Property for Tenants
Pitfalls of Renting a Home Property for Tenants
There are many advantages to living in a rented home. Renting a property eliminates the…Read More
If you’re planning to move or rent a new place soon, chances are, you’re likely concerned about how much of a security deposit you’ll need to pay before moving into your new place. In the past, it was quite normal for landlords to ask for upwards of three months’ rent paid in advance towards the security deposit, with no other security options for renters to choose from.
Luckily, this isn’t the case anymore. When searching for property rentals, there are a few different security options you might come across.
|1: One Month’s Rent|
|2: Zero or No Deposit|
|2.1: Responsibility and liability|
|2.2: Zero-deposit costs|
|3: Escrow Security Deposits|
|3.1 Escrow Benefits|
|4: Lease with Flexstay Rentals|
When renting a property in Thailand, paying a security deposit equivalent to one or two months’ rent is considered fairly standard. In most cases, renters can expect to pay two months’ rent for a deposit on long-term leases (six to twelve months). Keep in mind that placing down a security deposit is not the same as paying the first or last month’s rent in advance. Many mid-term leases require at least one month’s rent for a security deposit, plus one month’s rent paid in advance.
In May of 2018, a new rental law was passed to prevent landlords from demanding more than two months’ rent in advance from tenants, including security and rent and security. However, this applies only to businesses or homeowners that rent out more than four properties. Since traditional cash deposits are often a concern for renters (and landlords), other forms of security deposit options are becoming increasingly more in demand, including zero deposit and escrow security deposit options.
Zero deposit, sometimes referred to as ‘no deposit’, is a security deposit option that replaces traditional cash security deposits. In lieu of a bulk upfront payment, tenants can purchase rental insurance instead. Zero deposit insurance options can benefit landlords and tenants by providing peace of mind for all parties involved. including homeowners, tenants, and rental agencies. Instead of paying a large sum of money in advance and having it held for the duration of the rental agreement, potential tenants can opt to take out an affordable insurance policy that covers the property and other liabilities. Renters don’t need to worry about unreturned deposits and landlords don’t need to worry about unruly tenants. Read more about zero deposit and other security deposit options in our info article.
Although zero-deposit options eliminate the need for cash security deposits to be paid upfront, tenants still need to select and purchase an insurance plan before they can move into their new condo or home. Tenants are still held liable to pay for any damages, missed rent or utility payment, or other various fees like cleaning or service charges stipulated in the rental contract, and the insurance provider is responsible for ensuring that homeowners and landlords do not inflate move-out fees or other deductions.
Zero-deposit policy premiums typically range from four to eight days’ of the property’s monthly rental cost (one-time fee), often depending on the length of the lease term. When compared to the total costs of paying a full one or two months’ rent, plus first or last month’s rent in advance, zero-deposit options make the process of renting a new home much more affordable than ever before.
Security deposit options through escrow are paid to and managed by an independent third party. In the case of rentals made with Flexstay, our agency would collect and hold security deposits placed by tenants on behalf of landlords or homeowners. After checking out of a rental property, Flexstay Rentals will handle the process of refunding deposits to tenants.
Escrow service ensures fair practice and can benefit both landlords and renters in several ways, including:
No matter which type or form of security you choose to place on your rental property, it’s important to exercise and perform due diligence prior to handing over any cash. Get to know your landlord, read the fine print, ask other tenants or renters, or better yet, seek guidance from a reputable property rental agency in the area. Flexstay Rentals is one of the leading property rental agencies in Bangkok, Thailand. With our expertise, we can help you find and rent your next home and lease at ease.