As a rental property owner, the security deposit is a crucial process that needs to be understood to keep you out of trouble.
It is essential to note the security deposit is the tenants' money. They fully expect to get this money back at the end of the lease if they hold up their end of the lease agreement.
What is a Security Deposit?
A security deposit is a dollar amount that's collected by the landlord or Orlando property management company to protect against property damage due to a tenant's negligence or carelessness. This amount typically equals one month's rent but can be 1.5 to 2 times the monthly rental rate.
Why your property management provider should be holding the security deposit?
We get owners all the time asking why we the property management company holds the security deposit. The short answer is to ensure your protection.
A benefit to hiring a property management company is that their job is to keep you in compliance while reducing your risk & liability. They are licensed real estate agents that know the state laws and understand how the disposition of the security deposit has to be prepared and issued within the correct time frame. Here in Florida 15 or 30 days as required by Florida law.
The owner held the security deposit issue.
By holding the deposit, you may be tempted to use that money for other expenses. Whether by accident or simply not knowing how the deposit should be maintained. If you live out of the state of Florida, you will have to open a Florida bank account where the deposit must be held. Allowing your management provider to hold the deposit, you will eliminate any of those issues.
Also, they understand what normal wear and tear are and document the property properly prior to moving in your tenant. Some landlords think you can deduct normal wear and tear. However, that is not the case. A tenant can sue if their deposit is not handled correctly. Hiring a professional property management company will save you a lot of Time, Resources, and Money!