Rents are getting high in Atlanta, meaning that now is a great time to own investment properties. If you have an extra property sitting empty, why not rent it out and provide renters with housing?
New landlords often have a lot of questions about how to get started and what to do. Everything is new to them! We're here to break down one of the first things you need to know about: Security deposits.
What are they? How much do they cost? Read on to learn the answers to your questions.
What Are Security Deposits For?
So what's the point of a security deposit anyway?
A security deposit is helpful when it comes to protecting your property. When a tenant commits to the property, they send you a deposit to hold it for them. That deposit will also cover any damage that the tenant causes in the future, if applicable.
This encourages the tenant to treat the property well and it gives the landlord a safety net.
The deposit also benefits the tenants, however. When they find a place they love, the deposit secures it for them so no one else can apply for it. This effectively ends their search for rental housing.
The deposit is also helpful in the event of accidental damage. The costs don't have to come out of the tenant's pocket, and if they don't incur any costs, they get the money back!
How Much Should a Security Deposit Cost?
So how much should you charge? Well, it depends.
Georgia state law does not specify a maximum limit for security deposits. Landlords are, for the most part, free to determine the amount of the security deposit. That said, it should be reasonable and customary for similar rental properties in the area.
In other words, don't try to charge 3 times rent for a security deposit or you may not have many applications. It's considered normal to pay an average of one month's rent for a deposit.
Some landlords will lower or waive deposits if they're struggling to find tenants for their investment properties. It's legal to waive a deposit but weigh this option carefully.
Are Security Deposits Refundable?
All security deposits are refundable in Georgia.
When the lease ends, landlords in Georgia are required to return the security deposit to the tenant within 30 days of the end of the lease term. The landlord must provide an itemized list of any deductions, and those deductions must be for good reasons. Landlords should also provide a security deposit receipt.
You can not take money from a deposit for normal wear and tear. If a tenant feels that you retained their deposit illegally, they can pursue legal action.
Security Deposits Are Important
Atlanta landlords shouldn't underestimate the value of security deposits. Even if you plan on giving the money back at the end of the lease, it acts as a safety net for both you and your tenants while they're on your property! You don't want to miss out on that.
Do you need help managing your Atlanta property? At PMI Perimeter, we customize our property management services to suit each investment property owner we work with. Reach out to schedule a consult with us today.
