The Benefits of Deposit Free Renting
At first glance, deposit free renting seems like it only benefits the tenant. After all, a rent deposit gives landlords and their properties protection while their tenants live there.
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However, there are some clear benefits for both landlords and tenants when it comes to deposit-free renting.
How does deposit free renting work?
Simply put, the typical security deposit of four to six weeks’ worth of rent is no longer a requirement in order to rent a property. There are various schemes that seek to replace this deposit with another form of protection for landlords, such as requiring tenants to pay a non-refundable, smaller insurance fee.
At the end of a tenancy, instead of a landlord inspecting the property and deducting from the tenant’s deposit, they calculate the cost of damages that tenants will be required to pay. This still gives the landlords protection, as the tenants will still be legally required to cover any damages they’ve caused.
Benefits to deposit free renting
It reduces barriers for renters
Renting a property can be an expensive ordeal. Ensuring you can afford monthly rent payments preparing for potential furniture costs, paying fees for moving and relocating can be stressful enough, but adding a large payment on top of this can really limit choices for renters. Eliminating this large upfront cost for your future tenants makes your property stand out, and potentially result in being able to let it out more quickly.
Deposits pose a problem for renters
The upfront costs associated with moving into a new rental property are daunting, especially for first-time renters. However, no matter how many times you’ve been a tenant, there is always a wait time between leaving a property and receiving your deposit back, which can be extended even longer if there are disputes. With deposit sums easily reaching over £1,000 tenants are often faced with moving into a new property and paying a new damage deposit whilst waiting for their previous deposit. It’s no surprise that 80% of tenants prefer deposit free renting
Easier letting process for landlords
For landlords concerned about adhering to the Tenant Fees Act, particularly the caps on security and holding deposits, and the requirement to place deposits in a government deposit protection scheme, deposit free renting removes the need for this. If your property is in an area that experiences shorter tenancies with quick turnarounds in tenants, deposit free renting streamlines your letting process and makes it easier to get tenants in and out as quickly as you need to.
How can Mashroom help?
Any property listed with Mashroom can be let with a traditional deposit, or a deposit replacement. Tenants can search the platform for properties with both or either of these deposit options, and are able to contact landlords about their properties to negotiate a change in their deposit policy. Mashroom replaces the traditional large deposit fee with a replacement fee of one week’s worth of rent, which is a great selling point for landlords to offer their tenants.
In addition, we boost your rental security to 12 weeks of protection, with no additional cost to you. If your property sustains any damage, your costs are covered first before Mashroom settles the damages with your tenant. If you do experience any disagreements with your tenants, We’ve partnered with the world’s oldest and largest mediator, RICS, to help you find a resolution.