There are more than 10 million landlords in the United States. If you're among this number, you already know that renting out a home can be rewarding. But you also know it can come with plenty of pitfalls.
Taking a deposit from renters is one of the best ways to protect yourself against unforeseen circumstances. But it can be tough for new or inexperienced landlords to know how much they should charge for a deposit.
Want to know exactly how much you should charge for security deposits for rentals? Read on. We'll lay out some guidelines to help you decide how much to charge for security deposits.
The Golden Rule
Many landlords swear by the Golden Rule of deposits: one month's rent plus $100. That means you can cover a month of missed payments, with a little leftover for any damages.
While there's a little wiggle room available there, it's important you remember to abide by state law. The maximum security deposit amount landlords can ask for in North Carolina is equal to two months' rent.
Other Factors to Consider
The Golden Rule isn't really a rule. It's more of a guideline to give you a general idea of what to charge. There are lots of factors that might make you want to charge a little extra for your deposit.
Perhaps you've taken a chance on a renter with a slightly lower income, or one without a long history of renting. Perhaps the renter is a pet owner, meaning extra property management services could be required. If this is the case, you might want to consider demanding a larger deposit.
Many tenants looking to prove themselves as reliable will be perfectly willing to pay a little more to get their foot in the door. Just remember to abide by state law, meaning two months' worth of rent is an absolute ceiling.
The Importance of Security Deposits for Rentals
A deposit covers you in case of things going wrong. None of us have a crystal ball, so it's always worth putting measures in place to protect against disaster.
When renting out a property, there's so much that can go wrong. In North Carolina, when a tenant stops paying the rent, it can take weeks or months to get the tenant out. You may then need to go to court to get back rent paid out.
Knowing you've got a deposit to cover the costs of any disasters is a great way to get peace of mind.
Let Us Help You Manage Your Properties
Collecting security deposits for rentals is one of the most important things any landlord can do to guard against unexpected events. But deciding on how much to charge, collecting the money, and screening tenants can be a real hassle.
Help is at hand! Triad Property Management is here to help you with every aspect of life as a landlord. Whether it's collecting deposits or running background checks, we can offer you the benefit of our experience to make life easy.
Contact us today to find out more about our services and how they can help you.