A security deposit is the first line of defense, but it has limits. Combined with solvency scoring and rent guarantee insurance, it becomes a real safety net.
The essentials in 30 seconds
- The security deposit covers damage and short periods of non-payment — it does not cover extended default.
- The layers of protection available are: security deposit, guarantor, solvency scoring, and rent guarantee insurance.
- A guarantor is a backup, but enforcing it is slow and uncertain.
- More important than maximizing the deposit is choosing the tenant well before signing.
The problem
A one- or two-month security deposit feels like protection — until the tenant stops paying for eight months. The deposit covers only a fraction of the real loss from an extended default.
The layers of protection available
- Security deposit — covers damage and short periods of non-payment.
- Guarantor — a backup, but enforcement is slow and uncertain.
- Solvency scoring — assess financial capacity before signing.
- Rent guarantee insurance — guarantees payment even in default.
Where the real loss lies
The deposit solves weeks; the problem is measured in months. That gap is where a five-figure loss lives. Knowing your exact exposure before you sign changes the decision.
Frequently asked questions
How many months’ rent can I ask as a deposit?
The rules set limits; the lease must clearly state the deposit’s amount and purpose.
