My friend Pauli Loeffler helped contribute to this article. As with any contract, please review it with your attorney.
Is DepositIQ worth getting if you are a renter? In short, no. Read on for my opinionated analysis.
What is DepositIQ?
DepositIQ, in layman’s terms for a renter, is a way for you to pay less on your security deposit. I don’t know what it’s like in high-rent areas, but in Oklahoma City, it’s common to put down a $400.00 deposit for a year’s lease.
I imagine for most people, the ability to pay less to move in is the primary reason for going with DepositIQ.
So in short, for renters, DepositIQ allows you to:
- Purchase a Surety Bond instead of paying a security deposit.
- Non-refundable, unlike a security deposit.
- It covers you up to a certain amount in damages, including breaking a lease.
So on the surface, is DepositIQ worth it? Hell yeah.
Read the Fine Print
This is when you call your lawyer friends and have them read your contract before you sign it.
DepositIQ is not made for you, dear renter. It’s made for the apartment owner.
If you read the fine print, DepositIQ is indeed non-refundable.
You indeed only pay a fraction of what you would have to pay for the security deposit.
But when you move out, you better have that apartment in 100% perfect condition, or you’ll wish you put down a standard refundable security deposit instead of paying for a bond.
Security Deposit Insurance?
On the surface, DepositIQ seems like apartment insurance in case shit happens. I pay money in, and if shit happens, they cover me up to my agreed-upon amount.
Again, read the damn fine print of any contract you sign.
Sure, DepositIQ will cover you up to that amount. And then, according to their fine print, they will bill you for the difference.
You read that correctly. You pay the bond, have shit happen, have DepositIQ bail you out (theoretically), then you get billed.
So, dear reader, I ask, what is the point of purchasing this bond as a renter?
At least with a security deposit, there is a smidgen of a chance you’ll get some of it back. But with DepositIQ, you get none of it back, and you get billed for whatever they do cover.
DepositIQ is for the Apartment Owners
With DepositIQ, apartment owners can substitute a lower-priced bond for a security deposit, thus allowing you to move in with reduced expense.
Then, should the worst happen, DepositIQ will pay the apartment owner for its portion of the damage. Then, DepositIQ will bill you for what they paid. And if you don’t pay, DepositIQ will be the one pursuing collections and then your credit rating is obliterated.
Granted, the apartment owner can do the same thing if you don’t cover damages. But DepositIQ seems to save the apartment owners the hassle. Let someone else collect the deposit, get a guarantee of damages covered (reduced liability on their part), and let someone else take the possibly negligent renter to the poor house.
DepositIQ seems to be a hired gun. “Yeah, we’ll take your money and cover our boss. But we’ll be talking later, punk.”
And it’s not above speculation that the apartment owner gets a cut.
So is DepositIQ Worth it as a Renter?
Hell to the no. Suck it up and pay the security deposit. If there are damages, you’ll have to cover them anyway.
From my perspective, there is absolutely no benefit DepositIQ can give a renter aside from a cheaper upfront move-in cost.
I reserve the right to be proven wrong, and this article is simply my opinion, but I have the unsigned contract stored away for reference, and the fine print is damning.
If you are a renter who has purchased a bond through DepositIQ, how was your experience?
Since DepositIQ seems relatively new, as a renter, have you been offered the option, and did you take it?
If you are a property owner and use DepositIQ, please provide some insight in the comment section of why you’d use this service instead of a standard security deposit.