# The deposit myth: most tenants never get it back URL: https://www.leasesurance.co/blog/the-deposit-myth-most-tenants-never-get-it-back Title: The deposit myth: most tenants never get it back Summary: The rental deposit is sold as savings a tenant gets back. Data on more than 68,000 move-outs says it is a fee they pay upfront and rarely see again. --- [← Back to Blog](https://www.leasesurance.co/blog) Deposits The rental deposit is sold as protection and savings. Data on 68,000+ move-outs says it's a consumed fee, paid upfront as a barrier. LeaseSurance · Insights The rental deposit is sold two ways at once. To tenants it is savings, their own money held safely until they leave. To landlords it is protection. Our move-out data says it is usually neither. ## What the move-out data shows {#what-the-move-out-data-shows} Across **68,401 deposit move-outs** on the books we work with, **46% of tenants left owing money**. That is the balance at move-out, before a cent of damages or cleaning was deducted. Once those are applied, the share who see nothing back is higher again. On our fuller reconciliation, roughly **two in three** deposit tenants are refunded nothing at all. A deposit you mostly don't get back isn't savings. It's a deferred fee, paid upfront as a barrier. ## The affordability trap {#the-affordability-trap} That upfront lump is the problem. Deposit, first month's rent and moving costs all fall due at once, precisely when a tenant has the least cash. What filters people out is the move-in bill, not the monthly rent. Many bridge it with short-term credit, which quietly adds interest to a "refundable" amount they'll mostly never see. Count the cash tied up or borrowed over a typical stay and a one-month deposit costs around **6.6% of rent**, hidden and largely non-returned. [What the deposit costs the landlord](https://www.leasesurance.co/blog/lease-insurance-vs-cash-deposits-cost-benefit-analysis) is a separate bill. THE DEPOSIT MYTH ## Sold as savings. For most tenants, it isn't. {#sold-as-savings-for-most-tenants-it-isnt} 46% leave owing money. What 68,000+ move-outs reveal about the rental deposit. LeaseSurance Smart Leasing · Zero Deposits · 1/4 02 · THE EVIDENCE ### The deposit rarely comes back. {#the-deposit-rarely-comes-back} **46%** left owing at move-out **54%** nil or credit 68,401 deposit move-outs analysed · balance before damages & cleaning And that's **before** damages and cleaning are deducted, so the share who get nothing back is higher still. On the fuller analysis, roughly **2 in 3** deposit tenants are refunded nothing. LeaseSurance Smart Leasing · Zero Deposits · 2/4 03 · THE REAL COST ### A refundable fee that mostly isn't. {#a-refundable-fee-that-mostly-isnt} UPFRONT The barrier Deposit + first month + moving costs land as one lump: the real filter on affordability. HIDDEN The carry Financed on a loan or savings, the deposit costs ~6.6% of rent over a typical stay, and is mostly never returned. BETTER The waiver ~5% of rent monthly, no upfront lump, 3-5x the cover of a one-month deposit, and partially refundable on a clean exit. LeaseSurance Smart Leasing · Zero Deposits · 3/4 04 · THE POINT ## Call it what it is. {#call-it-what-it-is} A refundable deposit that mostly isn't refunded is just a fee, paid upfront, as a barrier. Built on data. Powered by AI. Underwritten by Guardrisk. LeaseSurance Smart Leasing · Zero Deposits · 4/4 ## A fee, priced like one {#a-fee-priced-like-one} The waiver is the same idea made honest. Instead of a large refundable-in-theory lump, the tenant pays a small monthly fee of around **5% of rent**, with no upfront barrier. In exchange the landlord gets [cover three to five times deeper than a one-month deposit](https://www.leasesurance.co/zero-deposit), and on a clean exit the tenant [earns part of that fee back through rewards](https://www.leasesurance.co/zd-rewards). The tenant keeps their move-in cash; the landlord gets better protection. The only thing that disappears is the fiction that the deposit was ever coming back. Figures: the 46% move-out arrears rate is computed directly across 68,401 deposit move-outs in the lease data. The ~2-in-3 not-refunded figure and the 6.6%-of-rent cost are from LeaseSurance's deposit-behaviour analysis. Illustrative rand figures assume a R5,000 monthly rent. ### About LeaseSurance {#about-leasesurance} LeaseSurance provides deposit-free lease insurance for residential and commercial portfolios across South Africa. [Speak to Us](https://www.leasesurance.co/contact)