Move-in day is already expensive. Renters are juggling moving trucks, utility setups, and the normal chaos of a new chapter. Then the big “extra” cost shows up: the security deposit—often equal to a full month of rent.

That upfront cost has become one of the biggest points of friction in leasing. In a national renter survey, Fannie Mae found that “affording upfront costs” (security deposit, first/last month’s rent, application fees) is one of the top challenges before move-in. (Fannie Mae)

Security deposit alternatives are gaining momentum because they solve that exact problem in a simple way: qualified residents get a lower cash hurdle at move-in, while owners still get meaningful protection when the program is operated with clear expectations and strong documentation.

Why security deposit alternatives are taking off right now

1) Upfront move-in costs are a real barrier—even for “good renters”

This isn’t just a vibes-based trend. The data keeps pointing to the same reality: many households don’t have much flexibility for surprise expenses.

• The Federal Reserve reports that in 2023, only 63% of adults said they could cover a hypothetical $400 emergency expense using cash or its equivalent. (Federal Reserve)
  Now scale that up to move-in week, where costs can stack into the thousands. Deposits don’t just “help owners.” They can become the thing that prevents an otherwise qualified renter from getting keys.

Harvard’s Joint Center for Housing Studies (JCHS) has documented how widespread rent strain is:

2) Rent pressure makes saving a full deposit harder than it used to be

• In 2022, half of all U.S. renters were cost burdened (spending more than 30% of income on rent and utilities), and 22.4 million renter households were in that category. (Joint Center for Housing Studies)
  When rent takes up more of a paycheck, saving a large refundable deposit becomes harder—even for renters who pay reliably month after month.

3) The industry is actively looking for ways to reduce friction without increasing risk

Freddie Mac Multifamily frames deposit alternatives in plain terms: high upfront moving costs can be a significant barrier, and deposit alternatives can eliminate the need for large upfront payments while still giving landlords a way to cover potential damage costs. (Freddie Mac Multifamily)
That’s the sweet spot: more access + maintained accountability.

The resident benefits: why renters like this option

Lower cash due at move-in (the big one)

Deposit alternatives are popular because they can reduce the “move-in cash mountain.” Instead of tying up a large refundable deposit, residents can often shift that cost into a smaller upfront amount and manageable monthly payments.

That’s not just convenience, it’s mobility. It helps residents:

• move faster for a job or family change,
• avoid draining savings in one weekend,
• keep cash available for utilities, moving costs, and everyday life.

A more predictable move-in experience

A deposit alternative can make the leasing experience feel less like a financial obstacle course. Residents don’t have to “pause life” to save up a huge lump sum before they can move.

The option to choose what fits their goals

Many residents still prefer a traditional refundable deposit because they want the chance to get that money back. Deposit alternatives shine when they’re offered as a choice, not a mandate, especially for residents who qualify but prefer a lower up-front hit.

The owner benefits: why homeowners (and PM teams) like it too

Faster leasing, fewer stalled move-ins

When “affording upfront costs” is a top pre-move-in challenge, reducing that barrier can expand the pool of qualified renters who can say “yes” quickly. (Fannie Mae)
That can translate to fewer days sitting vacant and less leasing drag.

Protection still exists (without relying on one big refundable pile of cash)

Deposit alternatives are designed to reduce upfront payments while still providing a way to cover costs from potential damage. (Freddie Mac Multifamily)
Owners don’t want risk. They want predictable outcomes. The right program structure can still support recovery when charges are legitimate and documented.

Less emotional conflict around “getting my deposit back”

Traditional deposits can create tension at move-out—especially when expectations weren’t aligned. Alternatives can reduce the classic “deposit refund anxiety” dynamic because there isn’t a deposit sitting there waiting to be refunded.

It doesn’t eliminate accountability (residents are still responsible for the condition of the home). It simply changes the financial mechanism and often reduces the emotional intensity of the “refund” conversation.

The “good neighbor” angle: why this can be a win-win when it’s run right

Freddie Mac also notes an important truth: deposit alternatives can benefit both sides, but operators need to ensure renters understand fees and obligations, including potential responsibility for claims. (Freddie Mac Multifamily)
That’s not a downside—it’s the blueprint.

The best programs win because they do three things consistently:

1. They reduce move-in friction for qualified renters
2. They maintain clear accountability for damages and lease obligations
3. They’re operated with strong documentation and clean communication (move-in condition + move-out documentation + itemized charges)

When those three are true, residents feel respected, owners feel protected, and the leasing process feels smoother instead of stressful.

The modern move-in that still respects the home

Security deposit alternatives are trending for a simple reason: they solve a modern problem with a practical option.

They help qualified residents move in with less financial strain. They help owners reduce leasing friction while still maintaining a path to recovery for legitimate charges. And when they’re communicated clearly and operated with strong documentation, they turn a common leasing pain point into a smoother, more human experience—without sacrificing professionalism or protection.

Additional Reading

• “Before move-in, ‘affording upfront costs’—including security deposits—shows up as one of renters’ top challenges in national survey research.” (Fannie Mae)
• “High upfront moving costs can block housing access for low- to middle-income renters—right when they’re trying to secure a home.” (Freddie Mac Multifamily)
• “When half of U.S. renters are already cost burdened, large upfront deposits can turn a qualified renter into a renter who simply can’t move right now.” (Joint Center for Housing Studies)
• “A single unexpected expense can derail a budget—so it’s not surprising that large move-in costs create outsized friction in leasing decisions.” (Federal Reserve)

Let’s Talk About Your Property