Today, I want to cover a crucial element of investment property ownership that doesn't get enough coverage, and that is the topic of security deposits and your rental property. How you collect and handle security deposits when it comes to your renters is one of the 'trickier' aspects of running a successful rental, whether your property is in Bradenton or Lakewood Ranch.
How much you collect—and what you do with that deposit when your renter moves out—says a lot about you as a property owner concerning how you manage your property. Real estate isn't always the easiest way to make long-term income, and correctly dealing with security deposits is a skill investors need to know.
Alternatively, if you don't feel like being hands-on with a rental home, you can leave these kinds of issues in the hands of a full-service property management company. An expert in Bradenton property management like Gulf Coast has the expertise and skill to handle everything from maintenance requests to rent collection.
If you happen to be a fan of the DIY lifestyle—or simply enjoy the challenge that running successful rental properties alone can provide—read on to learn more tips about successfully navigating security deposits for your rental homes in Manatee County.
A quick note: The following article is not a substitute for legal counsel. If you need immediate help with a pressing issue, turn to a competent attorney or the experts at Gulf Coast Property Management for assistance!
How Much Should You Collect as a Property Owner?
It’s always our advice as a Bradenton property management provider to collect at least one month’s rent as a security deposit. This is enough to ensure your renters are committed to caring for the property—as well as covering any accidental (and not-so-accidental) damage.
Depending on the rent you charge for your property, this can be a considerable amount in our area (imagine the value of a condo in downtown Sarasota)! However, it's ultimately a reflection of the value of your property—and won't be enough to scare a serious renter off.
When you do collect a security deposit, make sure it’s in cleared funds so your renter can't retract this deposit after move-in day. This sort of switcheroo can be the bane of a property owner's existence because it's usually a red flag that you've placed a 'Professional Tenant.' We recommend that property owners ask for a cashier’s check, but some people take cash and money orders as well.
How to Deduct Damages Safely
After your renter moves out, there may be some damages to the property that present themselves as maintenance issues or other costs you think should be attributed to your former resident. This is often a contentious issue between renters and property owners, so make sure you have evidence to back up such claims.
- As soon as a resident vacates your single-family homes or multi-family units, go in and inspect your rental home.
- Once you have performed a thorough inspection, compare this report from move-out day to the one you did previously before your renters moved in.
- Compare photos, take video, and log evidence that damage has indeed been done. That way, if you end up in a courtroom, you can demonstrate why you made charges to the renter's deposit.
- Once you have calculated those damages, you need to put them in a written notice and then get that notice to your renter within 30 days.
- If your resident finds these charges objectionable and are ready to dispute the issue, you’ll be required to explain why you are holding the money—potentially in front of a judge.
All the steps above are one reason why property owners in Bradenton entrust their investment property to our careful—and capable—property management services. We are your professional buffer!
Our Inspections Are Your Protection
As an expert Bradenton property management company, we look out for our property owners. However, we do caution our clients that most investors don’t believe in 'normal wear and tear,' while most residents think everything is wear and tear. It’s important to strike a balance between reality and financial need—and we handle that delicate balance with care.
At Gulf Coast, we perform three inspections during the year so we can prove beyond all reasonable doubt that the charges we apply to a security deposit are fair and reasonable. This allows us to establish a baseline for the condition of your Bradenton property—and how we expect it to be returned by your renter.
Beyond inspections, we also screen any applicants thoroughly before we place them in your property. This ensures you're less likely to get a careless or negligent renter living a life of luxury in your beautiful rental home while simultaneously trashing the place.
All of the above is just a small sample of how we approach the care of your rental properties in the Bradenton area rental market! To learn more, you should download your free copy of our guide, Protect Yourself and Your Investment: A Guide for Landlords in Manatee & Sarasota Counties.