The bond money actually goes to the bond issuer not the landlord, so the landlord doesn't get to collect the money and deposit it in an interest bearing account or use it for property upkeep, in both cases, when such a deposit use is permitted by law. It's an economic decision. The cost of funds to use our product is much lower than your typical deposit. A second option is deposit insurance. Chicago-based CNA Insurance underwrites insurance policies property owner buy to protect against damage and other losses.
Some property owners opt to charge tenants an annual basis.
The premium is based on the tenant's credit history, whether pets or smoking are involved, the apartment's furnished status, past rental behavior, references and other factors. However, the cost range is also based on the fact that the policy premiums drop each year the apartment remains damage free and there are no rental losses. While most rental tenants are short term tenants who move out within a few years, five to 10 years of premium fees could cost a lot more than a typical security deposit. If you are a multi-state property owner, it's much easier to deal with than the various regulations for security deposit escrow accounts, interest bearing accounts. A similar insurance-backed security deposit program goes one step further by allowing the property owner to participate in the profits.