Security Deposit Alternatives: Move In Without the Hefty Upfront Costs

Moving into a new home can be incredibly challenging. It takes a lot of elbow grease to pack your belongings, make arrangements with a moving company, and find the right home at the right price. In fact, one of the biggest hurdles you may face when moving into a new place is a huge, upfront lump sum cost in the form of a security deposit.

At Imagine Homes, we aim to make moving so easy and simple—all you have to do is come home. To help you skip the stress of paying a huge upfront moving cost, we offer a security deposit alternative for most of our homes.

Lowering the barrier to rentals

Most of the time, renters are required to pay a huge sum upfront to sign a lease. This inadvertently serves as a barrier to housing for a lot of people since paying for the first and last month’s rent on top of a security deposit can be a struggle, even if they can afford the monthly rent. That is where security deposit alternatives come in.

Security deposit alternatives are solutions that aim to lower the barrier to entry for residents, making apartments and single-family rentals easier to rent. For people struggling to cover the upfront costs of moving in, security deposit alternatives give them access to more options including the following:

Surety bonds

Surety bonds are currently the most popular security deposit alternative since they cost you only a small percentage of a traditional security deposit. With a surety bond, you don’t have to come up with a large sum upfront to move into your new home.

This type of security deposit alternative is an agreement between the renter and property manager overseen by a third party, known as the surety. Entering into this agreement essentially buys you the backing of a surety, which serves as the go-between for you and your property manager if any damages occur.

The surety covers the costs of any damages to your apartment that you are responsible for, which you’ll need to reimburse after the fact.

Security deposit installment agreements

From renting a moving truck to paying your security deposit, the upfront costs of moving can really add up. Luckily, there are many landlords and property managers that offer solutions to make moving in a little more affordable. Some of them offer an option to pay in security deposit installments, allowing you to pay the deposit over a few months or over the entire lease term.

This type of agreement is typically done in three ways:

• Four payments over six weeks. Renters can make the first payment at move-in and then cover the rest of the deposit by making additional payments every two weeks. 
• Three payments over three months. The landlord or property manager allows renters to pay the first security deposit payment at move-in. Renters may then make each additional payment monthly.
• Six payments over six months. This security deposit installment plan has the longest term but it’s also the least common. With this plan, renters can pay their first payment at move-in and cover the rest by paying monthly.

Pay per damage

In this unique arrangement, residents allow their property managers to bill them for damages—up to the total amount of their security deposit. If there’s a damage claim, a third-party company ensures your property manager won’t take more than the cost of the repairs.

This third-party company also allows you to dispute unreasonable claims and make payments in installments. The best part of this arrangement: this could cost you no money at all if you keep your rental home in pristine condition.

Automatic Clearing House (ACH) authorization

ACH authorization is a popular alternative to traditional security deposits. By signing an ACH authorization form, residents permit a bank, credit union, or any other financial institution to directly draft money up to a certain amount to cover damages. This allows you to move in with no upfront cost. To top it off, this agreement won’t cost you a lot as long as you cause no damage to your rental home by the time you move out.

Things to keep in mind

• Security deposit alternatives are not the same as insurance. Even with security deposit alternatives, you are still liable for unpaid rent, damages, legal fees, or utilities when you move out. If you leave without settling your financial obligations, the service and the landlord can pursue you for compensation.
• Always weigh your pros and cons. Security deposit alternatives are a great solution if you are struggling to cover your move-in costs. However, they are not meant to help you save money. Ultimately, they add another expense to your monthly budget but they make it easier for you to move into a new home.

Why we offer a surety bond as an alternative

We understand how quickly moving costs can add up. To make moving in a little bit more affordable, we offer surety bonds as an alternative to security deposits.

With a surety bond, you can easily move into your Imagine home by paying a one-time, non-refundable fee—amounting to a fraction of the cost of a traditional security deposit. This fee covers your premium for the duration of the lease or up to the bond expiration date, whichever comes first. As long as you abide by the terms of your lease, surety bonds can reduce your moving costs in the long run.

Skip the stress. Get a best-in-class rental in the Midwest.

At Imagine Homes Management, we’re proudly local and aim to deliver best-in-class service to our residents. Beyond fully-renovated homes, our locations are also second to none. Plus, you can save on moving costs with our security deposit alternative―fill out an application today and learn more.

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