Oh, security deposits—they’re useful, important, and oftentimes stressful. Whether you’re an experienced property owner or a first-timer, knowing how to handle a security deposit might be one of the most potentially contentious, and needlessly complex parts of being a landlord. Want to know how you should be handling your security deposits? The experts at Southwest Mountain Realty are here to assist!
How You Should Be Handling Your Security Deposits
The hardest thing about security deposits is just how little regulated information is really known about them. While deposits are typically required, there are a lot of possible variables, and we feel that learning some shoulds and woulds is the strongest place to start. To begin:
Setting & Collecting Security Deposits
Law regarding what a landlord should be charging, or the maximum at which they can, varies across the country. Here in Arizona, security deposits cannot exceed one and a half month’s rent. More specifically, you cannot demand higher than that amount. When setting your deposit, it is critical that you set carefully, legally, and with your business in mind. It’s also worth noting that pet fees and similar fees are considered a portion of the security deposit, only in the amount in question.
Lease Building & Security Deposits
When setting your deposit, it is absolutely crucial that you lay out in the lease very, very clearly what actions would necessitate the forfeiture of the deposit to you. Unclear guidelines and vague wording are what gets both tenants and landlords routinely in hot water. Avoid it! And for added measure, you’ll find it exceptionally valuable to do a walk-through with your new tenant before they move in. This gives both parties an opportunity to see the space as-is, and allows for clarification on any possible sticking points.
What to Do With Security Deposits
An important thing to note about deposits is that a security deposit is not your money. It is your obligation to hold it on loan safely until it is either returned to the tenant, or it is forfeit to you under the circumstances stipulated by your lease. The best way to handle a deposit is to place deposits into an account separate from your business and personal accounts. This avoids many common issues, including accidental spending or misplacement. It also makes keeping track of the amounts easy and stress-free.
Seeking Professional Help with Property Management
Another option, of course, is to rely on the accounting and collection expertise of professionals. Property management teams like the one at Southwest Mountain Realty have the experience, skill, and knowledge needed to make all aspects of accounting fast, easy, and completely without stress.
Want to gain the assistance of our property management team, or looking to learn more about what our experts could do for your business in Queen Creek? Contact us online today!