Did you know that security deposits don’t just protect the average landlord, they actually can only protect against minor damage? It doesn’t cover major damage, and while if it may cover the damage for partial recarpeting, it won’t do the full thing. It also may not cover the unpaid rent, and some states may go as far as to bar the landlords from using the security deposit in order to cover rent. But, in some states where landlords can use it for that purpose, one or even two month’s rent won’t cover the losses that the person is forced to have when they evict, so how can you protect yourself? Well, here are a few ways to protect yourself so that you don’t come out in the red after having a tenant in your space.
First, you’ve gotta tenant-proof the property, making it so that it’ almost like a defensible fortress against barbarian hordes. Tenant proofing means that you should replace the carpets with flooring, use glossy paint on the walls, put some door stoppers down, or even invest in putting shoe racks there, and you can also put in aggressive lease clauses to demand good behavior from the tenants.
You should also avoid any applicants that do complain about deposits. You should definitely watch this, because usually if they are making a noise either they’re lying, or they don’t have money to pay for rent. Those that are cool with paying the deposit usually are stable, and they typically have emergency savings, and a fund to help with this. So, they can be trusted. The other will typically have issues with paying rent, and they may also have issues with the damaging property.
You can also inspect the prior property that the person had. If you don’t want more damage, you should look to see how the applicant treats their home. If they’re respectful and don’t create an impact, and they take pride in their homes, they can be trusted. The opportunities, can’t be and that will be something that you should definitely consider.
With the lease, you should make sure that you’re specific on what normal wear and tear is. You need to have a certain amount of leeway, and you should also specify what is exactly normal wear and tear, and you can from there leave the lease to draw the line on that. By doing so, you can have a good control over what is put up, and sometimes, you can even take this to court. If they don’t follow this, they will get the deposit deducted, and usually, the clients will follow the lease agreement.
You should also not specify all of the deposits, because under the law, all of the refundable deposits are under the same limits, and usually, the deposit is two month’s rent, and all of the refundable deposits do fall under that. So you’re not helping yourself by setting up different deposit types, and often, this creates a limit that is self-imposed that you can deduct. So, if you collect about 150 dollars of rent for a deposit, and there is 500 in that cleanup, the tenants could make a case that you can only take up to 250 dollars of that for the cleanup, and not deduct money from the main deposit, so you should watch out for this.
You should also make sure that, when you begin with this, you do a move-in inspection and document everything. If you want to protect the property, if nothing else, do this. Make the inspections and create a report. You should do this with the new renter so that you can look at each case, and every single time, take photos of this and create a digital file. That way, in the end, you can get anything that is beyond the realm of normal wear and tear paid for by the tenant as they moved out.
When you’re getting a tenant into your property, you don’t want to come out in the red on the security deposit, and you can make it so that they’re able to be held accountable by doing all of these various different actions. For more, you can consult experts at point BrEEze real Estate to make sure everything stays fool proof at your end.