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.
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Why Increase Deposits?
- Charging a higher deposit helps protect against unpaid rent if tenants leave without paying final rent.
- However, many landlords don't increase deposits as wear and tear likely reduces claim amounts over long tenancies.
Handling Increased Deposits
- You can ask for a higher deposit if rent increases during a tenancy but it requires a new tenancy agreement.
- You must check with your deposit protection scheme for proper handling of increased deposits.
Time and Maintenance Costs Matter
- More smaller properties mean more management time and potentially higher maintenance costs, reducing effective cash flow.
- Valuing your time and maintenance expenses can make fewer, pricier properties more profitable overall.