What should Security Deposit Be?

Rehabbing, Fix and Flip, Rental Properties
1

I have efficiencies at $300 to $325.
One Bedrooms at 400 to 425.
Two bedrooms from 500 to 550.

And if they cause more damage than the security, you can ask them to pay the different right? Or put it in collections?

And do you have to keep in an a separate interest bearing account for Ohio and provide a statement to them each year, or is that just Massachussettes>
Thanks, Jag

2

Depends on practices and laws in your area. I don’t know Ohio law.

In MA, where I have rentals, state law restricts deposits to one months securirty, and deposits in escrow accounts, and a letter informing tenant where the monies are kept. I collect first, last, and one month security, normal practice most most landlords in the area of my rentals.

In NYC, no requirements for non regulated units, 5 and under, so I collect 1-1/2 month security, and do not deposit into escrow. Some applicants complain about the 1-1/2 month, about 10% of them, and others shrug it off. I find through the years that those that complain, had I gone ahead with them, when it comes down to it, are always financially stretched, and always behind in rent. Those that don’t blink an eyelash, I never have a problem with.

Once I got one tenant agreed to the 1-1/2 month, and only bought one month to lease signing. I walked away, and called the next person on the waiting list, and told him what happened. This man volunteered to give me two, even three months. I said “NO”, I only wanted 1-1/2 month. The amount is not the issue, again, it’s how the tenant handled things.

Another good or bad tenant indicator.

Then there are some areas where money is so tight that one month is all you can get.

3

I charge 1 months rent. If you are looking at some risk because the rents are so low, you can get advanced rent. For example get them to pay the 11th and 12th month in advance in addition to the first month and same for deposit. The key is to get them to have some skin in the game.

4
And if they cause more damage than the security, you can ask them to pay the different right? Or put it in collections

THAT’S FUNNY!

Mike