Is PRE-PAID RENT always a yes-yes?

Pre-paid rent is associated with tenants who are unqualified for an apartment on paper because of lack of employment, bad credit, etc. Thus the landlord isn't taking a risk on them. If you are qualified, you may not get a discount that way at all. Depends on the landlord, but not necessarily. Many landlords don't care as much about short-term cash as the size of their rent roll and would rather get more rent in the long run.

i have offered to prepay and been turned down, yet accepted as a normal monthly-paying tenant--i wanted to preempt sharing intimate financial info with my landlord--in the end they saw my credit score, and i showed a few bank/brokerage statements that made clear i had the wherewithal to pay rent for a loooong time--my guess was that they dont like to be prepaid, in case they want to evict for reasons other than nonpayment of rent??--go figure, i thought "bird in the hand" would compel them

The main disadvantage to the tenant is that if you have any problems with the landlord or with the apartment, you no longer have the one ace up your sleeve: ability to withhold rent.

People who offer to pay all up front make landlords look for warning signs that prospective tenant is a money launderer, engaged in criminal enterprises, tax cheat, just out of rehab, a person with problems with prior landlords. All = headache. Discount? Try premium.

Not unique to renting. Coops are wary of 100% cash buyers, too, very often.

Wbottom is correct that pre-payment presents a potential issue for the landlord in a holdover proceeding in Housing Court. I also agree with Fairway, that in my experience pre-payment is largely an alternative to satisfying the owner's qualification requirements. In the rare circumstance that the owner does agree to take the year up front, they will simply use the net present value of the payment. Expect them to select a very conservative discount rate (maybe 3%). I would also think that the likelihood of securing a higher discount rate would go up when dealing with a single-unit property owner (e.g. a condo) rather than a property management company. A single unit owner may benefit from the cash flow far more than a management company who 1) will see little to no benefit; and 2) may see the proposal as little more than an accounting burden.

Wbottom
That's tnot the reason, it's in certain circumstances against the law I believe, particularly in a landlord's mortgage language to collect that much advanced rent.
See a bank wont take too kindly to borrowers both defaulting on a loan and collecting a year in advance rent.
Im pretty sure that risk isn't allowed and is addressed in the fine print in most commercial mortgages. Someone more knowledgable please correct me if Im wrong.

Truthskr10 - I never seen such a clause in a multi-family mortgage. That being said, you did make a great point about legal issues: I totally forgot to mention that it can't be done with rent stabilized apartments.

An attorney once told me that, but it was a long time ago and it's hazy.
Any bankers/mortgage brokers that can clarify?

I don't know if it's ever against the law, but it could certainly be the case that the landlord's lenders or prospective lenders need to see certain numbers or cash flow in the rent roll, which may outweigh the landlord's interest in immediate cash at a lower rent (if the landlord isn't too rich to be interested anyway).

"Coops are wary of 100% cash buyers, too, very often."

Can we all get any more psycho? Only kidding, kylewest, your posts are pretty much always insightful. But we're swinging on this paranoid pendulum.....25% down isn't enough, 50% down isn't enough, they want 100% down! But wait, now they're wary of 100% cash, they'd prefer only 25% down, but wait, that's not enough, they want 50% down......

If five years of tax returns, credit checks, landlord checks, criminal background checks, bank statements, letters of reference, and notarized accountant statements aren't enough to squelch the paranoia, you're in the wrong business.

Isle_of_Lucy
29 minutes ago
ignore this person
report abuse "Coops are wary of 100% cash buyers, too, very often."

Can we all get any more psycho? Only kidding, kylewest, your posts are pretty much always insightful. But we're swinging on this paranoid pendulum.....25% down isn't enough, 50% down isn't enough, they want 100% down! But wait, now they're wary of 100% cash, they'd prefer only 25% down, but wait, that's not enough, they want 50% down......

If five years of tax returns, credit checks, landlord checks, criminal background checks, bank statements, letters of reference, and notarized accountant statements aren't enough to squelch the paranoia, you're in the wrong business.

paranoid? these people are going to be living in what is supposed to be your primary residence, right? isn't that what a coop is?

Wary in this way: a board is not going to be lulled into complacency because a buyer is all-cash in a coop. The absence of a mortgage does nothing to assuage the concern that a buyer be able to meet monthly maintenance and special assessment costs. My point is that just because you are all cash does not mean you will sail through the board. They'll still want to see a steady income stream. Why is everyone so over-caffeinated and extra bitchy on here lately? Maybe the cold spring is to blame...

My apologies kylewest, I did not intend to be bitchy, and I'm sorry if I came across that way. I was just trying to comment on the full gamut of opinions regarding cash down. I always believed the rule of thumb said that the more you put down, the better position you'd be in to ultimately get a co-op (all other things being equal, of course). And then I read your comment that often co-ops are wary of 100% cash buyers, so it just made me wonder, and shake my head a little.

I completely agree with you on the cold spring.

Holidays are a cold spring harbor.

How's the Garden State?

I paid for my rent a year in advance while I still met and exceeded the application requirements in order to secure a lower monthly rent. My unit was leasing for $7,600 and I paid $6,800/month by paying a year in advance. I am however regretting it for the reason stated above in that my landlord has moved at a glacial pace to make necessary repairs as requested because I can't hold back anything. Lesson learned and I won't do it again. However as someone who is fortunate to have a fair amount in the bank I can advise that no coop or landlord wasn't interested in cash upfront. The only folks who weren't were buildings which have some sort of exemption and this are prohibited by law from accepting per-payment of rent.