Security deposits can take a huge load off of any landlord's mind.
Florida ranks second in the nation for moves associated with foreclosure and evictions. If you're a landlord, you never want to evict a tenant, but sometimes you're left with no choice. The problem is that evictions in themselves can be an expensive and drawn-out process.
One of the best ways to nip tenant issues in the bud is to ask for security deposits. In today's post, we'll tell you how to manage security deposits for your Miami rental. Keep reading and let us help you take the stress out of being a landlord.
What Are Security Deposits?
Security deposits are a form of security that protects landlords from the money lost due to tenant issues. These issues most often come in the form of missed rental payments and property damage.
If you opt out of collecting a security deposit and a tenant causes you financial difficulty, it'll make getting your money back much more difficult. If you have a security deposit, you simply deduct the amount in question and give your former tenant a rundown of why you did what you did.
Security Deposit Laws in Florida
In collecting security deposits, it's crucial to abide by Florida's security deposit laws. Unlike some other states, there is no maximum amount when it comes to security deposits. That being said, it's important to remember the impact that an exorbitant security deposit can have on your rental prospects.
If you want the equivalent of two months of rent for a security deposit, you'll drive away plenty of qualified tenants. Most landlords will request a single month or half month of rent as a security deposit, but the amount is up to you.
When you have the security deposit, you must keep it in a bank account until it's returned to the tenant. Give the tenant a receipt notifying them of the location of their security deposit.
When to Withhold Security Deposits
Although missed rent or unpaid dues is a common reason for withholding a security deposit, the most common has to do with property damage. When a tenant moves into your rental, you'll perform a move-in inspection, which involves making note of the existing damage/wear and tear in the unit.
At the end of the tenancy, you perform the same inspection. If any potential damages need repairing, you'll deduct the cost of repairs from the security deposit.
It's important to document these expenses and provide the tenant with any receipts from products or services you had to purchase. If a tenant disagrees with your withholding the security deposit, they may take you to small claims court.
How Property Managers Look After Your Financial Security
Collecting security deposits is an important aspect of your financial security as a landlord. The best way to ensure your property and finances are looked after is to hire a property manager.
These services handle all aspects of running a rental property, from tenant screening to property maintenance. At PMI Miami Dade, we're a full-service property management company that can help you become a better landlord. Contact us today to learn more about our services.