The Pros and Cons of Collecting Last Month’s Rent

Are you able to find the best tenant for your property? If your answer is yes, then a big congratulation is for you. Really, picking the one from the potential tenants will never be easy. But now the thing is you have to decide how much money you need to collect upfront from the tenant before moving in.

When you are charging the first month rent along with the security deposits, then the question remains here should you collect the rent of the last month as well?

Don’t be in a hurry when you are deciding on collecting the last month’s rent. You have to know the same perfectly and then you make the decision. It is true that as the landlord, you may have the last month’s rent from the tenants but before the same, it will be good to know the advantages as well as disadvantages of the same. After knowing the same, when you make the final decision, then that will be the right one for sure.

Last month’s rent vs. security deposits

There are confusions between the security deposit and last month’s rent. The reason behind the confusion is the amount. Actually, both are just the same, so it creates more issues.

Before deciding to collect last month’s rent, it will be your responsibility to know what this means to and the same thing is applicable for the security deposit.

What is Last month’s rent?

In most cases, landlords were taking the last month’s rent at the time of signing the lease agreement. But now you are thinking about how does last month’s rent work? Then it means that you don’t have the information about it, and you need to know about this before making the mind or thinking to have it.

Actually, this is the amount equivalent to a month’s rent and it can be used if the renter has not paid rent at the time of moving out. If the tenants pay the amount perfectly and no dues are there, then this amount needs to give back to the tenants and they can take it from you or from your property manager Baltimore.

If the lease agreement addresses that the last month’s rent is due at the time of lease signing, and the tenants pay the same, then at the end of the lease, you can’t say anything is due. If you decide to renew the rent agreement, then the amount of the last month’s rent will be carried forward as part of the new lease and can be applied when the tenants are thinking to move out of the property.

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What is a security deposit?

When you are taking the security deposits from the tenants before moving in, then the complications of the same will be more. If you need to know what the security deposit is all about, then the brief about the same is:

  • An amount of money that is just similar to one month’s rent needs to pay to the property management organization or the landlord directly. The amount can be changed as per the state law. So, when you are thinking to have the security deposit, you need to know the state as well as local law, and accordingly, the amount can be fixed.
  • This is the protection that the property owner gets from the losses like not having the rent, damages to the rental property, and more.
  • When any type of issue like not having the rent or any other problem the renters do related to the damages and more, then the landlord uses the amount, and just need to inform the tenants about the same.

Why the confusion?

The reasons for confusion are more. Let’s know about the same.

  • The property owner or landlords think that the last month rent can be used for the damages of the property as well as other disputes that can be handled by the security deposits. In reality, this is not true. If in the rent agreement, the amount is mentioned as last month’s rent, then this is used only for paying the last month’s rent.
  • Many landlords think that they can take the first and last month rent along with the security deposits from the renters. But this is not possible for every location. There are many states that dictate to take the security deposit where last month’s rent is also included. So, if you are the one who thinks the same, then just make this conception vanish and know the law first and then decide which amount you can take.
  • Tenants also believe that the security deposit is just similar to the last month’s rent. So you need to tell them that they have the wrong information.For making everything clear, you should do the right outline and mention the same in the lease agreement. Surely, this helps your renters.
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For avoiding this situation, giving the brief on lease agreement will be the only way and if you find that the renters sound confused about the same after that as well, then you just give time to them to understand and sit with them for making it clear. This way, things will be understood outstandingly.

What are the pros of collecting the last month’s rent? 

There are many benefits that will come to you and these are as below:

Quality tenants

When you find the renters who are able to pay the first and land month rent along with the security deposits, then it means that you are able to find the financial stable renters from the potential tenants and it decreases the chance of not having the rent for any month and more.

Additional protection for the landlords

When you think to have the last month’s rent, then it means that your protection is more without any doubt because you have the amount that you can use if the tenants are moving out without paying the rent. At the same time, you have the security deposits that will help you to recover the cost if there is any damage to the property and even the tenants are not paying the rent for more than one month.

If you didn’t have the last month’s rent and use the security deposits for the damages and more, then for not having the rent, you as the landlord may need to take a trip to court and this may not be the situation that landlords ever preferto take. Obviously, having the last month’s rent with you can provide protection and there is no possibility of facing harassment for doing the lawsuits to recover the losses.

What are the cons of collecting the last month’s rent?

When you add the first and last month rent clause along with the security deposits, then paying that much of amount will not be possible for more. As a result, you may witness that the property is vacant for more days. Are you okay with the same? Surely, this will never be the thing that anylandlord prefers to face. Some renters may not have the issues of money but they don’t want to pay this much bigger amount.

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These all become the reasons for which you don’t get the tenant quickly and your rental income gets a pause.

Rent increase dilemma

As time goes, you need to increase the amount of rent. But if you renew the lease and make the rent increased then how you get the excess amount from the existing tenants. There will be a certain amount hike and asking for it will be a problem and in the end, when they move out, then it will be tougher for you to collect the extra amount and it gives you the reasons for problems.

For this reason, it will be important that you establish a good rent collection process as the landlord. If you give the responsibility to the property manager, then it will be good to be assured they have the right process to collect the rent, so that the problems of such things can be handled. But it is true that making the process perfect is not the guarantee to have the extra money back because if you don’t inform the person about the hike of the amount with the proper brief, then the situation can become bitter as things can’t sit properly between both of you and the relationship of the landlord and tenants can’t be perfect. No need is there to tell how problematic this is.


The security deposits and last month’s rent both are different and you surely have an understanding of it now. So, you just make your decision and draft the lease agreement accordingly. You don’t think that you can make it done on your own, then you just hire the right property management Maryland to help you in drafting the right agreement and make your rent collection procedures clear for avoiding unnecessary confusion, not only for you but also for your tenants.