Security deposits are important to ensure a profitable return from renting a property, especially to make sure that both the property owner and the tenant respect the clauses of the tenancy.
We shall delve deeper into the topic and discuss the best ways to manage your deposit money. It is reasonable to expect the best returns and profit when renting out your property to others and we shall point out the important factors in this regard.
Landlords need to keep up with a lot of information when renting out and taking security deposits. As legal matters go, these must be treated with caution and followed religiously. You don’t want to wind up unprepared in front of a judge on a security deposit issue.
Here Are What You Need to Remember:
1. Create a video of your property that reflects its condition before renting out and after the tenants move out of your property. A video is the ultimate tool to have in your hands. It provides an indisputable evidence of the situation and nobody will argue with what they see with their own eyes. You could send copies to your tenants and even present it in the court of law, should a case be raised.
2. Discrimination is a major offense while asking for a security deposit. In Arizona, as per law, the maximum deposit you may ask for is a month and a half’s rent. You may be penalized if you discriminate between tenants having children and those without while asking for a security deposit. The security deposit amount will, under no circumstance, be increased beyond what is stipulated.
3. Determination of damage can be a difficult task while deciding what actually qualifies as damage in your property. If a tenant moves out and you find the general look of the house old and used, it’s not a good idea to expect compensation. Arizona law states that while living at your property, a tenant may cause a little amount of wear and tear to the property.
4. Establishing trust accounts for security deposits is important in the event of any legal issue where your funds may be forfeited otherwise. Always keep a separate security deposit trust fund to ensure you don’t mistakenly spend the deposit amount.
5. There are very stringent rules/guidelines about returning the security deposit to your tenant. Make sure you know about the timeframe and act on it. There are serious legal ramifications in case you do not refund the money on time to your tenant. Should you choose to keep a part or all of the security deposit, make sure that not only is there a valid reason for it but also solid evidence. Presentation of evidence during court proceedings is vital in a case of a dispute.
6. To prevent any future troubles, it’s prudent to be wary of the number of pets a tenant may possess and act accordingly. It important to determine whether a deposit should be refundable or a non-refundable. The latter is more appropriate should you lease the property to a tenant with many pets as it’s almost a certainty that pets will damage your property to an extent. It’s best to retain one or two pets to keep the security monies viable for the tenants and to prevent your property from excessive damage.
Some Things to Remember about Hiring or Firing Property Managers:
1. Keep an eye out for how much your property manager is charging you for his work. There are certain tasks like registration etc. that may be inexpensive but you may be overcharged for. This a good indication that you need to look for a new property manager.
2. Make sure that you understand their accounting statements. Complex software and user interface can be really frustrating as you won’t know where your money is being channeled to. After all, everyone wants to keep perfect track of their money and so do you.
3. In case of your house being vacant for a long time, you need to find out what’s not right. Inquire about the property manager’s marketing methods and how much time they are giving to your cause. Also, you need to make sure if the price is too high or how many leads you are getting on the advertisement. Just make sure that all the bases are covered and your manager is efficient.
4. Observe whether your property manager is a good communicator. They need to follow up with the advertisement results and with any offers they might have received. If the follow ups are few and far between, then that’s a cue to look for a better property manager.
A Few Final Words On the Matter:
Renting comes with stipulations and State Laws that need to be adhered to. Any non-compliance can lead to unnecessary trouble. A number of pointers as mentioned above are crucial to a successful landlord-tenant relationship and a good property manager will complete that deal for you with minimal hassle. So, keep to the laws of your state and be sure to hire a reputable property manager who would handle your property issues.