Wednesday, November 20th, 2019 November20th2019

Sell for More News: Are security deposits really necessary?

Published on November 20th, 2019

Sell for More News is a weekly blog series with interesting information from the world of commercial real estate.


What if every tenant paid a small monthly insurance policy premium instead of a security deposit?

Enter…Rhino, a company that allows renters to pay as little as $2 a month for an insurance policy that can be used in lieu of a security deposit.

Landlords including Starwood Capital Group, UDR Inc. and Moinian Group have already signed on to use the insurance.  Nationwide, about 300,000 tenants are currently using a Rhino policy instead of a deposit.

The firm is aiming for an even larger customer base.  It created a policy proposal, directed at U.S. legislators and 2020 presidential candidates, that would require landlords nationwide to offer such insurance (or allow deposit installment payments) as a way to offer relief from the upfront burdens of renting.  It would also mandate that security deposits be transferable, following a tenant who relocates from one rental property to another.

Rhino says “Landlords are still protected, tenants save money and the money is free to be spent on health care, student loans or anything else.”

The Moinian Group, which owns and manages 3,000 apartments in New York City, is also an investor in the insurance product.  The landlord offers the insurance at all of its rental properties.

“These days, land prices, construction prices, rent regulations, taxes – all these things are so high that rent can’t really be drawn down to attract renters or make them more happy,” Moinian said. “It doesn’t happen. So we have to work with all other kinds of new applications.”

Offering deposit insurance “was a good way to make it more affordable for people wanting to live in our full-service luxury buildings,” Moinian said.

“Many markets have adapted to using alternative security deposits,” said Amy Groff of the National Apartment Association. “This is a way to attract more prospective residents and makes it easier for them to move in, less money required.”

“Landlords care about having the protection and the coverage in case of losses…they don’t actually benefit from holding the money.  That’s why this works so well, because of this a win-win model.  If we can reduce housing costs in America by $45 billion over next two years…that is the single-largest change to the housing cost system without any losers,” Rhino said.


From a landlord perspective, it’s cumbersome to hold money that’s not yours…which is the case with security deposits.  Most landlords would prefer not to deal with it if there was a suitable alternative.  As long as it’s easy to collect when there is damage or some other reduction of the deposit…this is a winning idea.


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About Beau Beach, CCIM

Beau is a tenacious Commercial Real Estate Broker, author and adoring father of four. His clients appreciate his no-nonsense demeanor and his legendary work ethic.

Beau leads Beachwood which is a commercial real estate broker for sellers in the Nashville, Milwaukee, South Florida and Chicago markets.

He’s the author of the books The 3 Reasons: Why Most Commercial Properties Don’t Sell and True Wealth: What Every Seller Should Know About 1031 Exchanges.

Beau can be reached at 800-721-3287, click to schedule a call or