The Property Podcast
ASK474: How would the monopoly strategy work in this situation? PLUS: Should I take a higher deposit?
Apr 29, 2025
Scott poses a thought-provoking question about whether to request higher deposits when rents rise. He also wonders if that additional deposit belongs in a protective scheme. Meanwhile, Rob considers his strategy shift from lower-cost properties focused on cash flow to pricier investments prioritizing capital growth. The discussion explores the pros and cons of investing in many smaller properties versus a single high-value one, weighing factors like cash flow, time, and maintenance.
08:29
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Quick takeaways
- Landlords can request a higher deposit during rent increases, but this requires a new tenancy agreement for complexity.
- The monopoly strategy suggests evaluating the trade-off between cash flow from cheaper properties versus long-term growth from higher-value investments.
Deep dives
Adjusting Deposits with Rent Increases
When rent increases occur during a tenancy, landlords have the option to request a higher deposit to match the new rental amount. However, this practice is not common, and it typically requires a new tenancy agreement, complicating the process. The reasoning behind increasing the deposit relates to ensuring adequate protection against the risk of unpaid rent at the end of the tenancy. Landlords may find themselves exposed if the original deposit does not cover the final month's rent, especially as properties are subject to wear and tear over time.
