Investment Property How To – Handling Security Deposits in Roseville, CAactionproperties
Regardless of how thorough your background checks are, you may one day rent your unit to a person who either won’t pay rent or not take proper care of your home. For this reason, every landlord is allowed to require a security deposit from their tenants as a form of protection.
A security deposit is basically what it sounds like. It is a precaution taken by landlords to give them a sense of security when having someone rent their home. The biggest controversy, however, a landlord can have with a tenant is over the security deposit return after the end of tenancy.
Since every state has different legal requirements regarding the collection and return of security deposit, it is important that the landlord familiarizes themselves with the requirements specific to their area.
In the state of California, home of Action Properties, Roseville Property Management, the total amounts a landlord can charge for the deposit is twice the amount of the monthly rent, or if furnished, triple the amount of the monthly rent. On rare occasion, the landlord may collect an additional deposit. In our area in Roseville, for instance, it is typical that you would take a security deposit that is equal to one month’s rent and the first month’s rent when moving in.
For example, if you were going to ask $1800 for rent, you would ask $1800 for security deposit. Keep in mind, though, security deposits are negotiable. Essentially meaning, it’s based upon your applicant. In order to determine how much security deposit you should charge, you want to look at their background information, employment, residency and credit history.
In today’s economy, we see people who unfortunately have things on their credit like foreclosures, short sales and bankruptcy. For our office, however, that doesn’t absolutely cancel them out as a prospective tenant. What we’ll do instead is look at the rest of their information.
If they have sufficient employment, their credit history verifies their story and we feel they have strong additional information that supports them, then we’ll ask for a double security deposit. Rather than asking for $1800 security deposit, we’ll ask for $3600.
Lastly, if you’re going to allow pets in the unit, don’t call the deposit a “pet deposit.” By calling it a “pet deposit,” you may use it for pet damage only. However, if you call it an “additional security deposit,” you can use that additional deposit on damages that might have incurred during tenancy.
It is also recommended during the move-in inspection that you document everything. Photo documenting is highly suggested because it helps eliminate any possible future disagreements when returning the deposit.