As a rental property owner, you want to ensure that your investment is protected both physically and financially from fire, hail, and other types of natural disasters. Certainly, carrying homeowner’s insurance can help you with the financial part. But what about damage or destruction that comes from an “internal” source, aka your tenant(s)? One way to give yourself at least some assurance here is by charging a security deposit. These funds are collected up-front (oftentimes along with the first and last month’s rent) and can be used for making various repairs or the replacement of items that have been subjected to more than a normal amount of wear and tear.
For instance, when a tenant moves out leaving broken windows or damaged appliances, funds from the security deposit may be used for getting the property back to the shape it was in before the tenant took residency.
On the other hand, if the tenant has not damaged the property in any way (above and beyond what is considered to be normal wear and tear), then the security deposit will typically need to be refunded to them.
Different states may have different requirements for if or when the security deposit should be refunded. In Florida, for example, the state’s security deposit law stipulates that the landlord return the deposit to the tenant within 15 to 60 days after the tenant vacates the unit.
So, how do you determine the right amount to charge for a tenant’s security deposit?
In many cases, the amount of a tenant’s security deposit will be the same amount as the monthly rent. This, however, does not have to be the case. In fact, the state of Florida has no statutory limit on security deposits (but different counties and municipalities may impose a cap).
Finding tenants, collecting rent, and dealing with repairs can be time-consuming for investment property owners. But you can recoup this time by hiring an experienced property manager. At CFL Property Management, we take over all of the tasks of marketing your property, screening potential tenants, and dealing with both emergency and day-to-day maintenance.
Want more information on how you can still benefit from your rental properties without all of the headaches? Just Contact Us and we’ll provide you with all of the details.