Security Deposit Alternatives for Small Multifamily Landlords

An owner of 30 units across a few small buildings asks a different question from a 10,000-unit operator. It is not which vendor to pick. It is whether a deposit alternative is worth having at all.

This page answers that first, then covers the vendors that carry the small multifamily tag in our database, which systems they name, and who pays. The rest of the security deposit alternatives category mostly sells to apartment communities with leasing offices.

Is a deposit alternative worth it for a small multifamily owner?

It depends on whether the cash deposit is causing you trouble. Peter Lohmann, a property manager who writes about the business, says it is not clear to him that there is a problem with the classic security deposit. If your deposits come back on time and disputes are rare, the category solves a problem you do not have.

The case gets stronger in three situations.

Your state or city sets escrow, interest or refund-deadline rules that make holding cash a compliance job. You lose good applicants to move-in cost. Or you spend real hours on refund checks and disputes.

The costs are the same at any size. The resident pays a non-refundable fee and, with most products, still owes for damage and unpaid rent. You add an agreement to the lease, so have counsel read it for your state.

Which vendors serve small landlords?

These vendors carry the small multifamily tag in our database, and the table above lists them with sources.

• TheGuarantors publishes a page for independent landlords, with testimonials from owners of 3, 5 and 20 units and no contracts or long-term commitments. Deposit Coverage, a surety bond, is sold as an option on its lease guarantee.
• Obligo keeps a billing authorization on the resident’s payment method instead of a policy. It is embedded in AppFolio and Buildium, so an owner on either can enroll residents from the system it already runs.
• Beagle sells renters insurance compliance and resident programs to property managers, including a non-refundable monthly deposit option with a limit from $500 to $6,000.
• Qira holds cash deposits in FDIC-insured accounts in the property’s name and offers zero-deposit and installment options. It says it is built for multifamily and single-family operators.
• ePremium Insurance sells eDeposit, a protection certificate that requires an ePremium renters insurance policy and is available only at its partner locations.

Others are a harder fit. SureDeposit enrolls residents at participating apartment communities, and Greenlight Rent, Rhino’s new name, carries only the institutional tag in our record.

Which ones work with your PMS?

Here is what our vendor database records for AppFolio, Buildium, Rent Manager and Rentvine:

• AppFolio and Buildium: Obligo is the only vendor that names them. Its Buildium connection sits in Buildium’s marketplace. See the Buildium integrations page.
• Rent Manager: Qira, Leap and Beagle name it. See the Rent Manager integrations page.
• Rentvine: Beagle is the only one that names it.

TheGuarantors names Yardi and Entrata, and ePremium names no system. A vendor that names no system may still work with yours, so ask to see a charge or claim reach the resident ledger.

Who pays, and what does the resident still owe?

For most products the resident pays and the property pays nothing.

• Obligo: the renter pays a non-refundable percentage of the deposit, usually up front for the first lease term. Obligo pays you by ACH at move-out with no claims step, and the resident repays Obligo.
• TheGuarantors: renters usually pay, and the landlord may pay for them. Deposit Coverage is a one-time fee for the tenancy, and the renter stays responsible for damage or missing rent.
• Beagle: the Renters Kit has a published base cost of $5 a month per tenant, and the manager sets the resident’s price. Eligible move-out damage is reimbursed after a claims review.
• ePremium: eDeposit is a one-time, non-refundable fee, and the resident stays responsible for damage above the deposit amount.

Qira does not publish who pays for its zero-deposit option, so ask.

What should you ask before you offer one?

1. Is there a minimum number of units or a contract term?
2. What does the resident pay at my typical deposit, and is any of it refundable?
3. Does the resident owe you after a claim, and who collects it?
4. How long does a claim take to pay, and what proof do you need?
5. What does the resident sign, and has it been reviewed for my state?
6. Can I keep taking cash deposits from residents who prefer them?

For the full field, see the deposit alternative vendor list. Owners of houses rather than small buildings can read deposit alternatives for single-family rentals. If Obligo is already on your list, Jetty against Obligo compares it with a surety bond.

Small landlords also choose a resident benefits package, and the resident benefits page for small multifamily covers that decision. Vendors who sell to this segment can read how AI visibility work for proptech companies runs.