With rents leveling off and predicted to fall, a lot of renters may find themselves looking for a better deal on a place to live soon. If you want to become a rental property owner, that makes now a great time to learn the ins and outs.
First-time landlords may not know all they need to know about security deposits. While the basics of collecting such a deposit seem simple, laws on security deposits differ from state to state. If you're new to the business, you want to make sure you know what will keep you on the right side of the law.
Keep reading and we'll cover the ins and outs of security deposits and the property management process in Texas.
How Big Can Security Deposits Be?
Under Texas security deposit law, you can charge as much as you want for a security deposit, so San Antonio landlords could set high security deposit values. An unusual deposit can drive otherwise qualified renters away, though. As a rule, one or two months' rent should serve the purpose well enough.
Some landlords add another deposit or increase the cost of the deposit if the tenant has a pet. This provides a cushion for removing claw marks, carpet stains, and other pet-related damage.
Do You Keep the Security Deposit?
As a rental property owner, collecting a security deposit protects you against damage caused by negligent use of the property. You cannot use a security deposit to pay for damage caused by normal wear and tear.
If repairs to a unit after the tenant moves out cost less than the value of the security deposit, you have to refund the amount left over. You or a property management representative will walk through the unit with your tenant during the moving process and create a list of expenses. This ensures both parties know what the charges entail and how much of a security deposit refund to expect.
Knowing the state of the unit when the renters moved in and moved out is the responsibility of both parties. Some landlords perform regular inspections of the property to ascertain its current status.
What Else Can Owners Use Security Deposits For?
In addition to using the security deposit to pay for repairs to the unit, you can use it to recoup losses from unpaid bills or nonpayment of rent. If a tenant breaks the lease, you can keep the security deposit. Make sure you lay this out in the rental contract.
Remember that you can't use it for parts of the unit for which the renter has no responsibility. An apartment complex seldom be able to use the security deposit for things like yard maintenance.
Protect Your Investment
In most cases, you'll return some or all security deposits to the renter. If a renter damages the property, though, you'll be happy you have the funds.
If you want the peace of mind that comes from assistance managing a rental property, give us a call for a rental analysis. We provide real-time information on how your investment properties are doing. We'll maximize your profits, handle sensitive issues like evictions, and make maintenance requests and billing easy to manage.
