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What Is Advance Rent, and How Does It Work?

Here's what you should know about requiring tenants to pay rent ahead of time.

[Updated: Feb 04, 2021 ] Feb 05, 2020 by Matt Frankel, CFP

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Advance Rent Security Deposit
• Must be treated as income in the year it is received.

• Can usually only be used to cover rent, not any damages.

• Not reported as income unless you keeping some or all to cover damages.

• Can be applied to either damages or unpaid rent.

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