DEPOSIT ALTERNATIVES LANDLORDS ARE USING TODAY Because of these limitations, landlords are exploring other ways to reduce risk while keeping units competitive. One option is deposit replacement programs, where tenants pay a monthly fee instead of a traditional deposit. These programs can make units more affordable upfront, but landlords need to carefully review coverage limits and claim processes. Another approach is higher screening standards, such as stricter income requirements or credit thresholds. While this reduces risk, it can also shrink your applicant pool and increase vacancy time. Some landlords still rely on cosigners or guarantors, especially for younger renters or applicants with limited credit history. But that comes with its own challenge since not every qualified applicant has someone willing or able to co-sign a lease.
THE GAP LANDLORDS STILL FACE
When a tenant doesn’t have a guarantor, landlords are forced into a tradeoff. Either take on more risk or turn away a potentially solid renter. But when that happens, landlords face added risk if the tenant leaves behind unpaid rent or costly damage that exceeds the security deposit. Even taking the tenant to court rarely results in full repayment, since many renters don’t have the assets to satisfy a judgment, and hiring a collection agency often adds expense without improving the outcome. This is where newer protection models, such as LeaseGuarantee, are filling the gap.
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