Pay Lease in Full?

That depends is the renter an exotic dancer or a drug dealer that only deals in cash?

3 to 5%. Be real careful that their financials are in order even if paid in advance. You need to know who and what they do. As Spunky mentioned a drug dealer would be a major problem, the exotic dancer not so much since that is usually legal when all they do is dance. Have not found any correlation with longevity.

Interesting angle... I never thought of that.

Well I believe that the renter is wealthy and owns several well known legitimate businesses in manhattan and internationally. Of course I don't know the specifics of his/her finances but this party is downgrading from a 3BR for personal reasons, but remains nostalgic about remaining in the building. My building staff claim they've never had payment problems from him in the past as well.

Is this a Condo or a Co-op?

Question to OP - did the renter ask for a discount or did you offer?

Unless there's a discount involved, I'd be suspicious of anyone who offers to pay a year's worth of rent up front. Why spend money that you can put aside to invest in the meantime? The only reasons I could think if are if the person is planning to travel extensively for a year and just doesn't want to be bothered sending out rent checks every month. Or is a student and his/her folks are fronting the bill. Or is clueless about personal financial management. Or has bad credit.

There could be a perfectly good reason but you never know, I agree you should perform some type of background check.

There are good reasons someone might pay up front. There are also many bad reasons. Some try to get a landlord to be lax on background checks by acting cavalier about the money not mattering and offerring to pay all up front. If a normally thorough background check is ok, alright, but at least as thorough a check as usual is wise. The offer to pay up front is a huge, waiving red flag to me. Personally, I would think something is wrong and not move off that assumption until there is compelling evidence to the contrary. The last thing you want is a guy who still has money being thrown out of his former place because of his out-of-control drug habit and downwardly spiralling life.

Once again is this a Co-op or Condo?

Background checks should always be run, even if the entire lease is to be paid in full. (especially tenant landlord court checks). And don't let the fact that they pay the entire year upfront stop you from getting security deposit.

This is a condo. I would require a security deposit. We are working with no broker fee so I'm trying to pinch an extra 3-5% and he probably knows it and was trying to negotiate down. Also he travels a lot for his businesses.

Again, new at this so appreciate the feedback about being suspicious. It is my belief that the guy is wealthy and it's very likely that a number of you have either heard of him or been to his place(s) of business here or internationally. He sold the last place he lived in, but I will still heed the advice here and get a background check.

Anything else to note? Would you offer a discount to the original quoted price?

There are a lot of high profile people who have money problems as well as any number of OTHER problems that might make them a bad tenant. I don't know why you want to pinch an extra 3-5% if you don't really know anything about vetting a potential tenant who will have a year to ruin your property & you seem to be in thrall to this person's supposed wealth & fame. An experienced professional broker should know all the ins & outs of property rental & you may be being penny wise & pound foolish. Good luck!

I rather have a regular tenant who has good enough credit to not have to pay so much up front.

What happens at the end of the lease? Your stuck with an otherwise undesirable tenant...

Good question MAV, what have other people done? Does the renter typically pay you in full again the following year, or is it month to month at that time?

Can anyone else share some positive or negative "pay annual rent in full" stories? (Albeit, most have been negative experiences so far.)

In today's world, money market funds are yielding 4% or less and likely to go lower. And that's before taxes. If you have a renter sitting on a lot of cash it might make sense for them to negotiate a 5% discount per year and pay a year or two upfront. It makes financial sense if they have nothing better to do with their money. As many people above have pointed out, do your diligence and get a background check, that's the key.

I wouldn't give him any discount and you should continue showing the apt to other prospective renters. I don't particularly like the idea of someone making an offer to pay in full it just rubs me the wrong way because they are already creating a question in my mind as well as indirectly asking for other privileges ie discount. These types are people are usually full if Sh%$^&t. Just my paranoia getting the best of me I guess. This person may be totally legit for all I know. Once again credit check, financials references usually filters the good from the bad.

Thanks for your caution and honesty spunky. Note: I'm was referred to him with no broker by my building staff (who I trust) so I do think the guy is legit. I showed him the apt prior to it being cleaned up so I will be in full rent/sell mode in a week or so.