What Are the Benefits of Collecting a Security Deposit?
Are you thinking of investing in a Portland Oregon rental property? If so, one of the most important things that you’ll need to do is collect a security deposit.
Sadly, few people in today’s rental market understand the importance of the security deposit, and this is one of the major reasons why landlords and tenants frequently squabble over security deposits every year.
In this article, we’ll provide you with more information about the security deposit just so that you’ll know its importance and why you should never consider overlooking it.
Reasons Why the Security Deposit Is Important
Money For Property Repairs – The first reason why the security deposit is so important is that it provides the landlord with money for repairs.
Yes, it’s true that not every tenant is going to damage the rental property, requiring the landlord to use the security deposit to make those repairs but, that money covers the landlord’s costs.
Landlords who use the security deposit for repairs must keep a proper accounting of what was purchased, and what work was done to repair the rental property after the tenant moved out.
Once the work has been finished, the landlord must send the tenant the remaining balance of their security deposit within 31 days.
For best results with security deposits, landlords should personally tour the rental property with the tenant before they move so that the tenant will know that the landlord is aware of the rental property’s condition at the point of move-in.
Motivates Tenants to Not Quit Their Leases Early – let’s face it, no tenant in today’s rental market wants to lose their security deposit, especially if they had to pay thousands of dollars just to move into a rental property.
With potentially thousands of dollars on the line, tenants will be motivated to not violate their leases by quitting early because they know that if they do quit their lease, the landlord will more than likely take their security deposit as their last month’s rent.
To protect themselves, landlords should take plenty of pictures and videos of their property at move-in, just to ensure that they have documented evidence that they can use in court, (if needed) to back up their claim that the rental property was left in poor condition when the tenant moved out.
Cleaning Fee – Even if the tenant leaves the rental property in move-in-ready condition, if that property has not been cleaned, the landlord can use all or a portion of the security deposit as a cleaning fee to cover the cost of cleaning the rental property.
Tenants should be informed that if the property needs cleaning at the time of move-in, the landlord will use a portion of their security deposit to clean the rental property from top to bottom.
Most tenants won’t hesitate to clean their rental properties after they move out so it’s important that landlords clearly advise tenants at the time of move-in that they can expect to pay a cleaning fee if the property needs to be cleaned when they move out.
Good Faith – So far, we’ve offered you several excellent reasons why the security deposit is an important part of any landlord’s business.
What’s most important about the security deposit is that it ensures ‘good faith’ between the landlord and their tenant.
By paying a security deposit that’s the equivalent of one in three months’ worth of rent, the tenant is showing the landlord that they are committed to living at the rental property.
Once it’s paid, the tenant is also showing that they have good faith in the landlord that the security deposit will be managed professionally and will be paid back to the tenant within 31 days after they move out, minus any expenses for repairing and cleaning the rental property.
Preserves Tenant Quality – Most important, security deposits also help preserve tenant quality.
Tenants who paid thousands of dollars for the security deposit will be more inclined to take care of their investment in the rental property, compared to tenants who only pay a few $100 to remove into a rental.
Having a high-quality tenant will also provide a landlord with peace of mind knowing that they have a hard-working, ethical person living in their rental property who will also not have any difficulty paying rent monthly.
Ensures The Quality of Your Property – Last of all, the security deposit also will help to ensure the quality of the rental property.
Every landlord wants to rent to a tenant who will take care of the rental property and preserve the quality of the home because doing this also helps to ensure that the home will be a viable place to live for years to come.
Contact Rent Portland Homes – Professionals
At Rent Portland Homes – Professionals, we are experts at everything Portland OR property management.
This means that regardless of if you need our property manager to handle tenant selection, maintenance, customer service, accounting, or security deposits for your rental property, you could have confidence that our team has the experience that you need.
With decades of combined experience in property management, our team looks forward to helping you manage your Portland rental property and providing you with passive cash flow from that rental for potentially years to come.
To learn more about the property management services that we can offer you, contact us today by calling (503) 791-4610, or click here to connect with us online