The easiest way to wear a human body down is to give it stress. And the easiest way to sleep at night peaceful is to take all preventive measures and predict the future. Being a landlord, your rental property is your lifeline. So, you should do everything in your power to prevent property damage. Security deposit is one of the many steps that you can take to keep your property in good condition. Here’s how it works:
Every landlord gets a sum of cash that is with him until the tenant finishes his or her lease agreement. The landlord can inspect the apartment and go through everything, checking for damages. If there are any, he can use the security deposit for repairs.
Why Ask for a Deposit?
Everything has a reason, asking for security deposit has three:
- Security deposit keeps you from a financial crisis.
- Security deposit also keeps the tents in line and manageable.
- A security deposit will make sure that the tenant leaves the place clean and perfect as it was.
How Much Should It Be?
Being too greedy will chase your tenant away and asking too low will not help you in any way. So, you need to find a middle ground that works well for both parties.
Fortunately, the law is on your side. Many states have a limit to what you can charge; however, there are some states like Texas and Florida that don’t have a regulated limit. But even then, you can take inspirations from other states and set your own limit, for example in California the deposit is two month’s rent. At the end of the lease, the landlord gets 21 days to give the deposit back. You can take this example and set your own limit if your state has none.
Factors That Affect the Security Deposit
If your rental is in a state that regulates the deposit, you are in the clear, but if this isn’t the case, you will need to consider all factors that may affect the security deposit.
The Monthly Rent
If your rental price is fair, then you will not have any issues regulating the security deposit. Most of the time, landlords set the deposit along the lines of their per month rent range. The rent price is set according to the location, the facilities as well as the maintenance of the property. So, it’s logical that the security deposit is set along the line of the monthly rent.
Market value is again a good factor to set the security deposit. If the market value of the place is large, you can set a large deposit without any issue. The large deposit will protect the many expensive features of your house; these are the things that add to the market value of the house.
How Does Furnishing Affect the Deposit?
If the apartment is well furnished and up to date with all the modern equipment, the landlord is justified in asking a higher security deposit. It’s not about the amount is about keeping your furnishings safe and secure from an irresponsible tenant.
You need to see all factors clearly like if your tenants have pets, charge even higher. Pets are messy, and they can leave irreparable damage. Even if there are no damages there is cleaning damage; you will need to take care of the mess they leave behind after the lease is over, like a professional cleaning service. The security deposit will pay for that.
Security deposit is a great way to save your rental investment from the madness of your tenants. Don’t shy away from asking the right price.
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