In 2021 statistics showed that over 300,000 rental households in Utah. With house prices on the rise, it's no surprise more people are looking to rent each year.
If you're an owner or real estate investor, you'll need to know how much money to charge to a tenant moving into your property. So how much is a security deposit? Read more to find out.
What Is a Security Deposit?
This is an amount of money you, as the landlord, will charge to the tenant. This is paid before the tenant moves into the property.
The deposit will secure their place as the new tenant. It will usually be paid after or at the same time as signing a contract for the property.
In different areas across the US, there can be a set amount landlords can charge for security deposits. This is not the case in Utah.
Ensuring tenants can afford the security deposit for the property is crucial. Keeping your properties occupied is easier if you don't ask for a large security deposit.
You will need to make clear that the security deposit cannot be used as the tenant's last month's rent check. The money should only be used for property damage and maintenance after their contract ends.
The security deposit price is down to you as the owner of the property. Keep in mind it needs to cover normal wear and tear plus any other things.
If you support animals in any of your properties, you could alter the price of your deposit as this may cause extra damages within the tenancy.
If you think your tenant is breaching the agreed contract and you need more information, click here.
How Much Is a Security Deposit?
If your property is in Salt Lake City, it is helpful to understand the general security deposit prices before you put your property on the rental market.
In 2021 the average rent price in Salt Lake County was $1,301 per month. The average security deposit is dependent on the price of the property per month.
It is normal for a security deposit to be fully refundable at the end of a tenancy; always produce a written receipt for this to help you with successful property management.
A standard price for the deposit will be between 1 to 2 months of rent. As there is no cap on deposits in Utah, it would be suitable to choose a price within this to make sure tenants can afford the upfront cost.
You could calculate this in percentages if this is easier for you and if you have many properties to keep on top of.
As a landlord, you may charge a non-refundable security deposit, but this is rarer, and you will need justification for this. The maximum security deposit is usually around 3 months rent.
Managing Your Investment Properties
Making sure you keep your investment property business organized is crucial. Keeping things running well can give you, as the landlord, easy access to monitor things like rent collection.
You can hire a property management team to manage your investments or even help you find a tenant. If you're looking for more help on how much is a security deposit, get in contact today.
