Helpful Hints to Handling Security Deposits
Before tenants move into a rental home or apartment, landlords usually ask for a security deposit. Why? Security deposits are often used to cover potential damages to the rental property. As a landlord, it is vital that you require a security deposit from your tenants. The last thing you want is to find out that something in your rental home or apartment has been damaged and you do not have the funds to repair it. Taking a security deposit from your tenants will ensure that you will be covered if damages do occur. So what are some helpful hints for handling security deposits? As property managers in Redding who have over 20 years of experience managing rental properties in Redding, we would like to help you as a landlord by offering some of our personal tips on handling security deposits below!
Determine the amount – most landlords require one or two months rent up front as a security deposit. However, it is different for every landlord. It is important that your amount for your security deposit be determined by what you think you would need in order to cover a major damage as well as what your tenants can afford to pay up front. Requiring too large of a security deposit can potentially decrease your chances of finding tenants, depending on what their current level of income is.
Do not commingle funds – as a landlord, it is important that you do not commingle your security deposits with your personal funds. When you are dealing with other peoples’ money, it is best to have separate accounts for those funds so that you don’t end up accidentally spending some of it because it was mixed in with your personal funds.
Know what your state requires – every state has different requirements when it comes to rental properties and security deposits. Some states require that interest is accrued on tenants’ security deposits. It is important that you look up the requirements for your state and implement those requirements into how you will handle your security deposits.
Keeping these things in mind will really help you as a landlord to keep things organized as your handle your security deposits. If you would like more information on how you can best manage your security deposits, it may be helpful to either talk to or hire property managers for your rental properties. A property manager will oversee and manage the critical tasks for your rental properties such as finding tenants, taking and managing security deposits, making sure rent payments are made on time, keeping the property in top-notch shape, and managing communication between you and your tenants. If you feel that it would be a good investment for you to hire a property management company to take care of these tasks for you, Authority Property Management does property management in Redding and would love to help you!
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