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security deposits

Security Deposits 101 – The Correct Methods for Handling Security Deposits

Security Deposits are without a doubt something that you’re going to deal with sooner, rather than later if you’re an owner.

In this article, we will share with you several things you should be doing with security deposits that will help you as you grow your portfolio of investment properties.

#1 – Be Clear About Your Security Deposit

Let’s say that you have multiple deposits including a pet deposit and cleaning fee, in this case, you shouldn’t hesitate to provide your future tenant with a statement that breaks down each deposit.

Doing this will help to eliminate any confusion regarding what your tenant is actually paying for and they will know to expect money to be taken from one or all of their deposits if they fail to clean the property before moving or cause damage to the rental.

#2 – Don’t Split Up the Security Deposit into Multiple Payments

Besides being clear about what your tenant is actually paying for, you should also not split up your security deposit into multiple payments because your tenant may not pay the full deposit before moving in and this could set a negative president if they expect to be able to delay paying some of their rent later on.

#3 – Keep the Security Deposit Funds in A Separate Account

Another important thing to do with security deposits is to keep the funds in a separate bank account because this will make it easier for you to pay back the deposit later on and eliminate the possibility of the tenant’s security deposit being spent.

#4 – Have A Before and After Inspection with Your Tenants

Last of all, but most important, always have a before and after inspection with your tenants because this will enable you to document the condition of the property when they move in and out plus eliminate any confusion if you have to use some or all of their deposit to make repairs to the rental property after your tenant moves.

Contact Vestpro Residential Services

To learn more about security deposits, or to speak with us about our property management services, contact us today by calling (832) 971-1841 or connect with us online.