SubscribeTenants’ Security Deposits: The Law and Accounting – Landlording TV – #29
Security Deposits can actually get very technical! Depending on your state, you might be required to:
- You may have to pay interest on each Security Deposit depending on the number of units in each of your properties.
- The interest rate is determined by your State
- You must offer several different options to pay your tenant their Security Deposits’ interest
- You are entitled to Administrative fees on the interest (watch to see what I mean)
Landlord Lessons:
- Use RentCheck, our Free Online Landlord Software, to help record your Security Deposits.
- Learn your State’s Laws regarding Security Deposits. They can get very technical!
Go to http://www.GetRentCheck.com to sign up for your free account, now!
Hello – can you give me advice on pet deposits? How much? Is it refundable or non-refundable? Do you charge added rent for a pet? if so how much? (by pet I am speaking of a puppy that will be a 90Lb adult dog when grown)
Hey Cliff,
Great question! I ALWAYS allow pets, which is unsual because a lot of landlords don’t. So if you are allowing pets, advertise that you do with additional security to one-up any local competition!
There are several ways to handle pet security deposits. I ALWAYS do it on a case-by-case basis. So for example, if a tenant wants to bring 1 cat, we may charge $100 additional refundable security deposit (and that’s it), whereas a large dog (especially a 90lb one!) we charge typically $250, with $100-$150 refundable, depending on if the unit has hardwood floors, vs carpets. If your unit has carpets, PLAN on replacing them when this tenant moves out, so make sure you cover yourself now! Always plan for the worst! ESPECIALLY since it’s a puppy and probably not totally potty trained yet! But we also make the security deposit up-front partially non-refundable instead of charging extra rent each month. Tenant’s get mad about “extra rent” because they see it EACH month, whereas Security Deposit paid up front that is non-refundable (even partially), it sits better.
Also, make sure your state allows these types of Security Deposits and the amount you plan on charging (NY, where my properties are, does).
Thanks!
-Justin
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