If you need that money that badly that it's a financial burden on you if they don't pay on time, you may want to reconsider why you're renting out a place to begin with. I rent out my old townhome and an additional 4 places I bought. I didn't even consider this until I knew I had 6 months cushion to pay expenses related to each property I was renting. I learned quick that renters are unpredictable and that's just the nature of the beast. I won't get my rent on time every month of the year, I won't have every tenant fulfill the lease, I won't have every tenant leave my house in pristine condition, I won't have a tenant within 2 weeks after a previous tenant moves out. It's just the way it is. Ideally I wouldn't have to have that cushion, but it's a much better option than worrying if Johnny is going to pay is rent by the 1st every month.