One of the hardest parts about getting into a new apartment are the up-front costs. With average monthly rent costing more than $1500 a month, coming up with enough cash to cover first and last month's rent plus a security deposit can be a daunting task even for the most fiscally responsible renter.

In the past, there was no getting around deposits. They were just a fact of life, even if keeping track of deposits over the life of the lease was difficult for the properties. Fortunately for both renters and site staff alike there is another option available that lessens the financial burden on the renters and significantly reduces the amount of time spent managing deposits.

That option comes in the form of a surety bond, also known as a deposit alternative. Deposit alternatives replace the large, one-time security deposit with a more manageable monthly payment that will cover the cost of any damage that occurs in the unit over the life of the lease.

Other alternatives include a guarantor and lease insurance. A guarantor helps those with low or invisible credit scores qualify for leases, but they don’t necessarily replace deposits. Credit authorization services create the capability to withdraw money from a resident’s account when damages occur, which essentially guarantees they’ll pay for any damages and eliminates the need for a traditional deposit.

Lease insurance eliminates traditional deposits by adding a much more affordable policy to the rental agreement. Lease insurance is used to cover any damages made to the property up to the coverage limit on the policy. From there, the resident is responsible to make up the difference. Lease insurance is designed to provide properties with higher protection levels from bad debt than traditional deposits.

The one downside of deposit alternatives for residents is they won’t be able to recoup any of their premiums even if they don’t ever file a claim. However, the tradeoff of not having to come up with a large amount of money upfront before moving in is likely worth it.

It might be difficult to imagine a world without security deposits to obtain an apartment. Properties needed them to safeguard against damages and ensure residents have the capability to pay their rent. But traditional deposits are becoming even more of a burden for new residents in the harsh economic climate, particularly when combined with moving costs, pet fees and other upfront costs associated with moving.

One of the biggest benefits of deposit alternatives for property owners and management companies beyond the time savings gained by not having to manage traditional deposits is the increased amount of coverage available for each unit. It’s estimated that deposit alternatives provide as much as 50% more coverage than traditional security deposits.

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To learn more about how you can deploy Deposit Alternatives from Entrata at your properties, request a demo today.