If you're someone who loves investing in properties, it's important that you understand the market you're stepping into and how to get the best results.
Roughly a third of households in North Carolina are renters. It's a renter's market, which means you can take full advantage of it and turn a profit when you make the right decisions. One of the most important decisions you can make is deciding how to handle the security deposit.
These tips will assist you when you need to learn about security deposits and how they come into play with your rental property.
The Purpose of Security Deposits
A security deposit is a charge that most homeowners issue to new applicants before they can sign a lease. Security deposits are in place to protect against liabilities property damage and coming short on rent.
When you're renting out a property, you need to figure out how much to charge for a security deposit, and how much you are allowed to, based on the law in North Carolina.
According to North Carolina statutes, landlords can charge 2 weeks for a week-long temporary lease. For a month-to-month lease, landlords can charge a maximum of 1.5 months of rent. For anything longer than month-to-month tenancy, landlords are able to charge a maximum of 2 months of rent.
How Much to Charge
Make sure that you consider your rent amount when you're figuring out how much you want to charge for a deposit. Consider your property accounting and how much you'll need to recoup if something goes wrong during a lease.
When you have the help of a property manager, they can provide you with landlord advice on how much to charge for a security deposit. They can also help you collect payments, choose a bank account to store it in and manage the rest of your accounting correctly.
Handle a Move-In Checklist
A real estate investor needs to understand Charlotte homeownership so that they can capitalize on each property that they decide to purchase. This includes understanding how to keep a property up to par.
Failing to maintain a property can reduce your property value and make it more difficult to rent it out. Hold your tenants to the same standard, and make sure that the property is well-kept during the course of their tenancy.
Conduct a move-in checklist so that renters acknowledge the state of the property when they move in. This way, if damage is done, all parties will know whether it was already like that or caused by the renter. Any damage from tenants will be paid for starting with their security deposit.
Being transparent with your tenant will motivate them to keep the property at its best so that they can get their deposit back at the end of the lease.
How to Collect Security Deposits
These tips are helpful when you own property and need to collect security deposits. Make sure that you stay up-to-date on property finances, security deposit law, and more.
PMI Mecklenburg is a company that you can turn to when you're interested in getting property management services. If you're ready to get started, contact us on our site or call (803)760-0984.
