Increase Security Deposit
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Increase Security Deposit (by WMH [NC]) Feb 16, 2024 9:07 AM
       Increase Security Deposit (by RB [TN]) Feb 16, 2024 9:31 AM
       Increase Security Deposit (by Ken [NY]) Feb 16, 2024 9:34 AM
       Increase Security Deposit (by S i d [MO]) Feb 16, 2024 10:17 AM
       Increase Security Deposit (by Vee [OH]) Feb 16, 2024 10:21 AM
       Increase Security Deposit (by jonny [NY]) Feb 16, 2024 10:30 AM
       Increase Security Deposit (by Still Learning [NH]) Feb 16, 2024 10:33 AM
       Increase Security Deposit (by Sisco [MO]) Feb 16, 2024 11:33 AM
       Increase Security Deposit (by pete [OR]) Feb 16, 2024 4:20 PM
       Increase Security Deposit (by WMH [NC]) Feb 16, 2024 5:03 PM
       Increase Security Deposit (by Tarheel T [NC]) Feb 16, 2024 5:36 PM
       Increase Security Deposit (by WMH [NC]) Feb 16, 2024 6:13 PM
       Increase Security Deposit (by Greg [MO]) Feb 16, 2024 8:50 PM
       Increase Security Deposit (by 6x6 [TN]) Feb 16, 2024 10:06 PM
       Increase Security Deposit (by BRAD 20,000 [IN]) Feb 16, 2024 11:50 PM
       Increase Security Deposit (by WMH [NC]) Feb 17, 2024 8:41 AM
       Increase Security Deposit (by BRAD 20,000 [IN]) Feb 17, 2024 2:01 PM
       Increase Security Deposit (by zero [IN]) Feb 17, 2024 4:29 PM
       Increase Security Deposit (by WMH [NC]) Feb 19, 2024 2:00 PM
       Increase Security Deposit (by Ian [GA]) Apr 13, 2024 7:51 AM
       Increase Security Deposit (by WMH [NC]) Apr 13, 2024 11:01 AM


Increase Security Deposit (by WMH [NC]) Posted on: Feb 16, 2024 9:07 AM
Message:

I know we are all limited by law in what we can charge a tenant, but be sure you are collecting the max you can.

I've been doing 2x the rent for new tenants for several years now as that is NC Max. But a few years ago I went back and billed all my OLD tenants as well: when they signed a new lease, their security deposits increased along with the rent, so any increase (say $25 to pick any number) meant they also owed $50 (2x the rent INCREASE) to increase the SD on hold to its correct amount.

Even if I didn't increase their rent I still increased the deposit to the 2xRent. It was an interesting couple of years collecting it all - and I did payment plans on a few where the SD increase was quite high - but I did and now everyone has 2x on file and they expect it at lease renewal now.

Well except one guy is on a M2M and if it's not an Annual Lease, I can only collect 1.5 times the rent. He just got a raise in rent of $100, and a bill for $150 for the SD increase. Paid it without a question.

I don't feel bad about this at all. I figure if they take care of my property - SID would say if they are good stewards - I will be a good steward of THEIR money and return it all when their tenancy is up. Like a tax refund, it's kind of forced savings for them.

Having 2xRent on hold makes them much more conscious of lease terms such as NOTICE and CLEANING and COOPERATION...they now have substantial money in the bank waiting for them. Some more than $3500.

I *could* have used those payments towards even more increased rent, but I personally like the security of having it in the bank and the delight (of all) when I return it all because I get back clean, rent-ready places.

Collect what you legally can. It's good for everyone. --173.28.xx.xxx




Increase Security Deposit (by RB [TN]) Posted on: Feb 16, 2024 9:31 AM
Message:

All in separate savings accounts, accumulating

interest, rewarding all of the long term tenants,

who left their places in perfect, move in condition. --69.130.xxx.xxx




Increase Security Deposit (by Ken [NY]) Posted on: Feb 16, 2024 9:34 AM
Message:

I am surprised that anyone pays you the additional security, i think you must be doing a superior job of explanation or something you are doing is superior.What would you do if they refused to pay the additional security? In my area no judge will evict for not paying a security deposit or the increas since the security deposit is the tenants money being held by the owner. The lack of units in your area probably helps since you can be picky and get good tenants --73.177.xxx.xx




Increase Security Deposit (by S i d [MO]) Posted on: Feb 16, 2024 10:17 AM
Message:

Nice work, WMH! I need to consider how I might implement this with old tenants who got in with less than that.

I am definitely getting the max security for new tenants. Too many blips have been popping up recently. Not a ton, but too many. One blip is too many in my book!

Missouri also limits us to 2x the rent. Any time I have someone with no landlord history or no credit (not BAD credit), I demand (and have been getting) the double security. I'll be interested to see how it helps at move out time.

Side note: the limit on security deposit was set with good intentions, I'm sure, but it also makes it impossible for me to consider mediocre or worse tenants. I cannot imagine giving keys to someone who was evicted 2 years ago without having AT LEAST 3 months security.... preferably 6 months! The crazy thing is: some of them have that much cash sitting around because they've been camping in Mom's basement for 24 months doing nothing but saving money... but I can't, by law, accept it even if they are totally willing and able to pay it.

Law of unintended consequences. I wonder if more are hurt than "helped?"

--184.4.xx.xxx




Increase Security Deposit (by Vee [OH]) Posted on: Feb 16, 2024 10:21 AM
Message:

Ohio does not have a cap on deposit -could be a flat 4000 or 2 times 2000 rent but at one of our landlord meetings the housing judge suggested using a double deposit in 2005 to help cover move-out damages, ironically in 2006 Ohio voters approved the no indoor smoking law which is why many of us wanted more than 1 monthe rent value as a deposit amount, from the deposit 350 per room was spent to remediate and refinish a room in a place that had been smoked, then in 2009 came the federal no smoking in rentals law. My daughter is starting to do applications and constantly gets asked why we use a double rent value deposit, she used to be one of the painters so she tells the applicant she does not work for free. I suggest you all petition your government to allow raising the deposit amount to conform to the smoke free rental law passed by HUD in 2009. --184.59.xxx.xx




Increase Security Deposit (by jonny [NY]) Posted on: Feb 16, 2024 10:30 AM
Message:

Ken, when I send out my renewal letters with an increase, it also includes a statement about the increase of the security deposit "to make it the same as rent". They all have paid it (so far) and I've been doing it for a few years.

Prior, I never thought about increasing the SD until I read it on here and thought "oh man, I totally forgot about the SD!!"

When I talk with them it actually makes it much easier for both of us to fully understand what the SD would be to get back (my rent is $800 so that is what my SD would be coming back to me).

Plus, the "good thing" (if you will) with the extended notice of providing them that their rent is increasing, the majority of them actually will send their SD amount a month (or two) earlier than the new rent does so it works out. --69.201.xx.xxx




Increase Security Deposit (by Still Learning [NH]) Posted on: Feb 16, 2024 10:33 AM
Message:

NH only allows deposit not to exceed one months rent. We have tried to get legislation passed allowing 1 1/2 or 2 times rent amount but it has always failed. They always claim itís too much money for people to afford. We try to explain that without being allowed to have higher security deposits that is why nobody wants section 8, pets, eviction, bad credit, etc. --166.194.xxx.xx




Increase Security Deposit (by Sisco [MO]) Posted on: Feb 16, 2024 11:33 AM
Message:

My deposit amount is less than 1 month rent amount, it has been sufficient for all move outs of tenants who were easy to garnish. These folks keep their agreements better than the hard to garnish crowd. --149.76.xxx.x




Increase Security Deposit (by pete [OR]) Posted on: Feb 16, 2024 4:20 PM
Message:

There is no max security deposit here. My deposits have been 1 months rent plus $500 to $700. I might try increasing the deposit next time as a test. --35.132.xxx.xxx




Increase Security Deposit (by WMH [NC]) Posted on: Feb 16, 2024 5:03 PM
Message:

RB, the SDs sit in an LL Trust account, combined per LLC, and any interest accrued is for the benefit of the LL. State law as long as that is spelled out in the lease.

If the state ever comes knocking, I need to be able to produce a complete breakdown of how much is being held for who. I track that anyway so no big deal.

(We had a major PM here put out of business for not being careful with the tenant deposits. Stupid.)

As someone else from NC told me (here) judges don't like to see EXTRA money in that account either, they want it to balance and not include any of the LL's money. So interest is withdrawn as it accrues...which is really pennies but I still transfer it out as soon as it is deposited.

One of the few benefits of an LLC is that I used to have to maintain a separate account for every single unit, which really was a pain.

I know you like to make fun of me regarding our move-outs, good turnovers, and good tenants, but the higher the deposit the better the tenant. Funny how that works. --173.28.xx.xxx




Increase Security Deposit (by Tarheel T [NC]) Posted on: Feb 16, 2024 5:36 PM
Message:

Im getting around 3% in my Sec Dep Account as long as balance stays above 25k. Have been mulling over going after old tenants with low sec deposits. I do mostly sec 8 so will be a chore! --75.131.xxx.xxx




Increase Security Deposit (by WMH [NC]) Posted on: Feb 16, 2024 6:13 PM
Message:

I haven't shopped interest rates for SDs because I'm lazy but maybe I should. I'm getting like .0001 percent, I bet. --173.28.xx.xxx




Increase Security Deposit (by Greg [MO]) Posted on: Feb 16, 2024 8:50 PM
Message:

I mostly do 2x rent. Great credit will go 1x.

Also did this once in past it might violate SD law but I don't think so because not SD but prepaid rent.

Less than stellar applicant so offer them this. SD 2x rent and they must pay rent early and STAY prepaid ahead 2 months.

So 600 rent, 1200 SD, 1200 prepay rent, 3000 at move in. Worked pretty good.

Thoughts? --192.129.xxx.xxx




Increase Security Deposit (by 6x6 [TN]) Posted on: Feb 16, 2024 10:06 PM
Message:

I need to get back to this and I need to look up the law that Vee mentions.

I like your processes WMH. It amazes me how you get them to work. --73.190.xxx.xxx




Increase Security Deposit (by BRAD 20,000 [IN]) Posted on: Feb 16, 2024 11:50 PM
Message:

W,

You go girl!!

You run a great operation. Interesting to see the success of your approach. We must adapt.

My thought is that cleaning and repair costs have gone up much more than rents, AND with rents much higher if they fall behind the numbers grow quickly, so a single month as security may not be enough.

Find what people want and let them pay you for it! They want your nice places.

BRAD

--73.103.xxx.xxx




Increase Security Deposit (by WMH [NC]) Posted on: Feb 17, 2024 8:41 AM
Message:

A single month is not enough, it becomes last month's rent in their mind. TWO months does not.

It's easier for tenants to find a cleaner than for me: they have a sister who owes them money and will clean off the debt, or they pay a friend who needs money, or they just happen to be very clean people who actually clean after themselves. Regardless, money is at stake and they do it. Just as long as they follow the checklist and return it ready to occupy, I don't care who cleans it as long as it is not me or mine. --173.28.xx.xxx




Increase Security Deposit (by BRAD 20,000 [IN]) Posted on: Feb 17, 2024 2:01 PM
Message:

AND...

Good to challenge us all to review state law and review want we CAN do.

BRAD --73.103.xxx.xxx




Increase Security Deposit (by zero [IN]) Posted on: Feb 17, 2024 4:29 PM
Message:

I have never brought deposits up. I know it is needed.

It has only been a few years since I started bumping rents for existing tenants.

The rent increases have proven once again why I try and pay attention in class here.

Again this is not something that is commonly done in my area. I see the need for it tho, especially with the increases in materials and labor costs. --107.147.xx.xx




Increase Security Deposit (by WMH [NC]) Posted on: Feb 19, 2024 2:00 PM
Message:

I honestly think I started the 2x the rent trend that is becoming normal here locally. It was all one month's rent when we first started. At first I started with a few hundred more than rent and explained to tenants that it was so we all understood and agreed it was NOT last month's rent, and that explanation always went over just fine.

When I decided to increase to 2x the rent, I just cited inflation: cost of materials and labor IF there should be a problem - of course I didn't expect there to be one...(at least that's what I said!) But it really turned out to be true: higher deposit, better care taken of property. Faster reporting of potential damage-causing problems (water!) And so on.

We DO give them fair value for their money: DH is super-fast to act on properly reported issues. He tells them when they are viewing the property: "We want to take care of the place. Some landlords will tell you not to bother them. We say PLEASE bother us!" --173.28.xx.xxx




Increase Security Deposit (by Ian [GA]) Posted on: Apr 13, 2024 7:51 AM
Message:

Bottom line. Iím insecure. I am afraid of ďIan, I have this x problem and canít pay my rentĒ. The math of an eviction is much more than 2x security deposit.

SoÖnow that Georgia is about to limit security deposits to 2x rent, what are additional ways to get security?

Iíve looked at:

1) Co-signers

2) Security deposit insurance

3) Collection agencies and garnishments

These are just OK. I really just want cash. I am disciplined enough to hold the money in a separate account. Itís not my money. I canít borrow it, spend it or invest it. I just look at it. Then, I work my butt off doing repairs and providing good customer service. It works. Customers stay with me a long time.

But back to the question, what can I call the extra cash beyond the new limit of 2x rent for SD?

Administrative fee

Incentive fee

I work for you and do repairs, but some people burn me fee

Performance fee

We had storms here this week and a tree fell. Thankfully nobody got hurt. Also, a carport ceiling needs repair. I gotta go. But if anyone can help with a name for the extra cash, please help.

Thanks

--107.77.xxx.xxx




Increase Security Deposit (by WMH [NC]) Posted on: Apr 13, 2024 11:01 AM
Message:

What you really need is good hard screening of tenants! You need responsible, cooperative tenants who CARE about getting their deposit back, who care about their own home, who care about paying their bills and their credit rating.

You could charge 10 times the rent for a deposit but if you get the wrong tenants it won't matter. Think of 1970's Rock Stars in Hotel Rooms LOL! They could afford the destruction, and didn't care...

Jeffrey's #1 Criteria for a tenant: COOPERATION. Once we adopted that as our mantra too, we have had no issues KNOCK WOOD. We happily give deposits back! --173.28.xx.xxx





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