There are almost 50 million housing rental units in the United States. A lot of these are investment properties on which someone's livelihood rests. There are many different methods and strategies for managing rental properties , including security deposits.
Property managers may be tempted to eliminate security deposits. This can help make rental units more attractive in a competitive rental market. There are some very good reasons you should think twice about doing so.
This article covers the importance of security deposits in Bellevue, WA. The information below details the many protections a security deposit can provide. Keep reading to find out how implementing them will help your business and your real estate investment.
Why You Should Collect Security Deposits
Very basically, security deposits allow landlords to recoup expenses from damage to a rental property. Note that, in most cases, this does not include normal wear and tear from daily living (see below).
There are other scenarios where security deposits can come into play though. One is if the tenant leaves the property in an excessively filthy state. If the unit requires property managers to hire special or extra cleaning specialists, they can use the security deposit to pay for that.
Another common situation is when a tenant fails to pay rent. While the security deposit may not cover many months of unpaid rent, it can be retained, even if you have to pursue other legal actions.
A final situation where a security deposit can benefit landlords is if there is an early termination of the lease. This can supplement the financial loss landlords experience by having the property unrented before expected. It also can help cover time and money spent advertising the unit for re-rental.
Laws That Apply to Security Deposits
It is important to note that laws dictate how much a landlord can charge for a security deposit and why they can keep all or part of it. For instance, in Washington state, landlords must either return the security deposit or issue a statement about why they are keeping it. They have 21 days from the time the property is vacated to do so.
The law also states that landlords cannot retain security deposits for "ordinary use of the premises." This includes usual wear and tear of daily living, such as minor dents.
It is important to understand the laws where you live so that you can be sure you are operating in full compliance. A reputable property management company can answer any further questions you might have about this or other issues.
Find a Property Manager in Bellevue, WA
Now that you understand the importance of security deposits for your rental properties, you can decide if it is the right move for you. Such policies can help protect you and your real estate investments.
BRINK is committed to protecting our clients' real estate investments and long-term profitability while providing quality housing services for tenants. We offer a range of services, from grounds maintenance to tenant screening, rent collection, bookkeeping, and more. Reach out to us today to schedule a free consultation.