Security Deposit Tips for Landlords and Property Managers

Security Deposit Tips for Landlords and Property Managers

Single Property Management - Wolfnest Property Management Logo - Salt Lake City Property Management

Security Deposit Tips for Landlords and Property Managers

 

There are some things that property managers can do in order to avoid any complications when it comes to security deposit. Here are some simple tips that can help you avoid any complications when it comes to security deposit.

 

1. Know your state laws

 

As a property manager or landlord, you need to how much your state law allows you to collect, how quickly does it need to be deposited into a bank, are there required reports, if there will be interest – how should it be paid and so on. These are important things to understand when becoming a property manager. It is also important to understand that the security deposits for residential property falls under a statute and calls for a nondiscriminatory and equal treatment. This prohibits any kind of discriminatory practices.

 

2. Charge the right amount

 

Don’t be tempted to charge less for a security deposit, which you are entitled to. It might seem easier to have a lower amount in order to attract more tenants, but you might run into risks and problems down the road. You should always consider what your house is worth and consider who your tenants might be. Setting the right amount of security deposit will not only help pay for any damages that may occur to the property but it can also weed out the financially unstable tenants. That way you will get a tenant that you will want to let live in the rental property. The right amount can also help prevent a tenant from moving out unannounced.

 

3. Security deposit

 

Security deposits are not extra rent and you shouldn’t treat them as such. Those deposits have to be returned to the departing tenant assuming there is no damage to the unit.

 

4.  Establish trust accounts

 

Make sure you establish a trust or escrow account for the security deposit. Make sure your bank knows that the deposits account is for security deposits only. This is to help prevent any forfeiture of those funds being accidentally spent on your behalf.

 

5. Don’t Mix the Account

 

Make sure you keep security deposit trust account separate from your own, even though some state laws allow you to mix it with rents or turn it over to the rental owners. Try not to mix up the account because it is far too easy to accidentally spend the security funds.

 

6. Handling escrow money

 

Even though you have a broker’s license for many years and you can legally handle escrow money like security deposit, doesn’t mean that you should. Get trained or hire a professional who is an expert with escrow funding’s.

 

7. Let your property owners know

 

Make sure to keep the property manager in the loop with what you expect out of them. Take proper steps to ensure that your property manager understand the procedures and policies on handling security deposits. Along with that, make sure that the property manager understands what his or her are task and that they are to be completed. Don’t let his or her negligence cost you a tenant or lawsuit.

 

 

 

 

Utah Property Management – Filling Units in a Tough Rental Market

Utah Property Management – Filling Units in a Tough Rental Market

Single Property Management - Wolfnest Property Management Logo - Salt Lake City Property Management

Minimizing a vacancy is the single largest cost cutting move a rental property owner can make. If an owner is not able to fill a rental quickly, it can affect the bottom line and adversely impact the cash flow generated. When an owner hires a property management company, he/she expects the vacancy to be reduced and a qualified tenant to be placed in the property ASAP.

So what measures does a property management company take to get your property occupied in the shortest amount of time? Below are different tactics that a property manager will use to fill your property in the shortest amount of time:

 

  1. Reduce the security deposit  – Although it is always prudent to collect a sizable security deposit, requiring too much may limit the pool of prospective tenants. Instead of requiring a tenant to pay a security deposit in addition to first and last months rent, a property management company may consider only collecting a security deposit equal to 1 months rent. This will increase the number of potential tenants interested in renting your property.

 

  1. Lower rent to slightly below market value – Although renting your property for less than market value will net you less money each month, having your property vacant for 2-3 months is a loss that you will never make up. Renting your property for slightly less than market value will also generate more qualified applicants, in addition to enticing a tenant to remain renting your property for longer as they are receiving a good deal.

 

  1. Utilize good property management software – A comprehensive property management software will allow the property manager to stay on top of all vacancies and have them processed in a timely manor. This also allows the manager to track all rent related costs including marketing, maintenance repairs, and cleaning.

 

Although paying a property management company to manage your rental property may seems like a cost you would rather not pay, if the company is able to significantly minimize your vacancy, you may want to consider hiring one. If the company can save you 2-3 months of vacancy a year, they have more than covered the fees you will pay.

 

Having trouble filling your vacant rental? Download our free owner information packet and find out how we guarantee you a new tenant in 30-days.