Make Your Rental Security Deposit Work for You
Throughout the renting process, many complications face prospective tenants during their journey in finding a suitable and adequate residence to call home. Limitations arise in renting options, including but not limited to a lack of past renting history, no guarantor, a lack of taxable income, but perhaps the most impactful factor deciding on what type of residence one can qualify to rent is a renter’s financial pliability. As if combing through the myriad of advertised spaces for rent wasn’t debilitating enough, filtering homes in accordance to what the renter can feasibly make for monthly payments, the prospect of having to have, at the start of a lease, three times the monthly rent can be overwhelming and for some, an impossible hurdle.
Data recorded by MagnifyMoney, a child-organization to LendingTree that helps consumers understand personal finance through comparative data, calculated that Millennials in the United States have on average less than twenty-five hundred dollars in their savings account. Coupling that with information given by Department of Numbers (a repository for real-time social, economic, and financial data, through the 2017 Census ACS survey), the average median gross rent for Florida was $1,128 (the highest it has ever been since the series began in 2005), it is evident that most renters would need to deplete their savings in order to just be able to sign their lease. So, what can one do if they are looking to rent, yet want to remain financially flexible?
Federal Alliance is a nascent organization finding an alternative to security deposits through the use of a billing agreement between the tenant and landlord. Harry B. Joseph, founder and CEO of Federal Alliance, inspired by the social entrepreneurial work of Muhammad Yunus, created this effective avenue of bypassing the complications that occur involving security deposits in the renting process. This way, at a fee fractional to that of a security deposit, a renter does not need to have nearly as much capital to put forth when signing a lease for a home.
Federal Alliance’s billing agreement is as advantageous to the landlord as it is to the tenant. High costs for security deposits deter potential renters occupying a vacant property not producing revenue for the landlord, thus making the agreement profitable for them, expediting the time a property isn’t being rented. Regarding a claim being made, Joseph states: “We do not get involved,” explaining that if a dispute is made, it would be handled judicially the same way as if a security deposit was initially taken. Federal Alliance provides this credit in the event of a claim through low, affordable, monthly installments made by the tenant.
Joseph believes the one-year old company needs constructive exposure in order to take the next proverbial step in becoming a reputable and effective business in his community. He attributes the fear of inauthenticity as a hurdle for his company to overcome, expressing how inquisitive viewers to his website seem to be reluctant to trust in an organization when they are already bogged down by the pressures and trepidation that comes with shopping for a home to rent. Joseph encourages anyone curious to reach out to his company through his website, where any questions will be personally met and answered with transparent solutions. He has also scheduled outreach events at Mima’s Cuban Cafe in Coral Springs, as well as at Florida Atlantic University in the fall.
“I just have to get out into the community for people to see us.” Joseph states, his words infused with veracity prompted by his belief in his company’s intentions.