You invest a lot of money in properties and then hand the keys to strangers. Obviously, there's some risk in that, but owning rental properties is also an excellent money-making strategy.
However, when renting to tenants, you should take essential steps to protect yourself. One step is performing tenant screenings. Another is collecting security deposits.
Landlords must follow the laws relating to security deposits, which means you must learn them. Continue reading to learn a few vital things about security deposits in Atlanta.
No Limit on the Amount
As a landlord, learning security deposit laws is your responsibility. Of course, you can alleviate these duties by hiring a property management firm to handle the work.
But it's still helpful to know the law. The first thing to know is that there is no limit on the amount you can request for a security deposit.
Some states limit the amount to one month's rent or one and a half times a month's rent. You can choose the amount.
You may use a standard rate for determining the amounts. You may also choose an amount based on the quality of the tenant.
Choosing great tenants is always important. If you don't have time to perform thorough screenings, outsource them. This service improves the quality of tenants for landlords.
Places for Storing the Security Deposits
In Georgia, landlords must follow the legal storage laws for security deposits. When you receive security deposits, you have two options.
First, you can place the funds in an escrow account. An escrow is an account held by a third party. Secondly, you can post a surety bond for the security deposit.
Failing to store the funds with one of these options has consequences. The primary one is you waive the right to withhold a tenant's deposit when they move out.
How to Handle Deposits When Tenants Vacate
Landlords may keep a security deposit from a rental property under certain conditions. However, you must follow a few rules.
First, you have one month to return the funds to the tenant. The time starts when they move out.
Secondly, you must include a letter stating why you're keeping the money if you decide to withhold it.
Finally, you can withhold some or all the money for several reasons. For example, you can keep it if the tenant owes rent money. You can also keep it for damages the tenant caused in the unit.
You should inspect a rental property after a tenant moves out. You may also want to inspect units annually, as some tenants may live in their units for more than a year.
Learn More About Our Services
Security deposits are a vital part of a rental property business. Following all landlord-tenant laws is also essential.
Do you need landlord advice on this subject or anything else? We can help.
PMI Atlanta West is a full-service property management firm. We focus on excellent customer service for residential and commercial properties. We are locally owned and operated in Atlanta.
Get in touch with us today to learn how we can help!
