Rental prices are on the rise in Charlotte, and that means that security deposits are getting higher too. If you're a new landlord, you might not know what this means.
What are security deposits for, anyway? Why do they benefit you and your tenants, and how much should they cost? Let's talk about it.
Read on to learn all about security deposits.
Why Are Security Deposits Helpful?
So you might be wondering what security deposits are and why they're so important.
Not every landlord chooses to collect security deposits for their rental properties. This is a personal decision and you can use your best judgment. With that in mind, security deposits can benefit both landlords and tenants alike.
When a tenant gives you a security deposit, they're securing the rental home. Even if the home isn't yet available, the deposit says that the tenant has the right to it when it's ready.
Because the deposit is refundable under most conditions (more on that later), it means that the tenant will be able to get it back later when they're ready to move to a new apartment or home. It also motivates them to treat your rental property well so they can get that deposit back.
So on your end, you get tenants who are trying harder to keep your property in good condition so they can get their deposits back. In the event that something happens to the property, you can use the deposit to make repairs so money doesn't have to come out of your pocket or your tenants' pockets.
Are There Limits to Security Deposits?
There are regulations around security deposits in Charlotte.
First, landlords must, in most cases, deposit the money in a trust. This is to ensure that it's safe and sound when the tenant is set to get it back.
Landlords can charge a max of two months' rent as a security deposit if their tenants are staying for at least two months (meaning it's not a month-to-month rental).
For month-to-month rentals, landlords can charge up to a month and a half of rent.
Most landlords choose to match the security deposit to the cost of the rent. This will make it easier to attract tenants.
When Do You Have to Return a Security Deposit?
In almost all situations, landlords must return security deposits to tenants within 30 days. Security deposits can be withheld if the tenant didn't pay their rent or if they caused damage to the property.
There's a difference between damage and "normal wear and tear." If the property is still in good condition, the tenant should get their deposit back. Here's a list of a few examples of common wear and tear vs damage.
That's All You Need to Know About Security Deposits
Security deposits aren't complicated. Remember that your tenants expect to have to pay a security deposit, and as long as you're fair, they won't mind. Deposits encourage your tenants to treat your property as if it were their own.
Are you looking for help managing your property in Charlotte, North Carolina? At Wilkinson Property Management, we can assist you with rent collection, property marketing, and all other aspects of managing properties.
Learn about our services so we can start working together today.