One thing is for sure when you own a rental property in Antioch, CA – the goal is to make money. After all, you don’t intentionally invest in a piece of real estate wanting to lose money.
That said, there are many ways to lose money as a landlord. For example, your tenant might stop paying rent. Worse yet, your tenant might abandon the property and disappear. And what happens if your tenant damages your rental? Think about how much money you’ll have to invest into your rental to fix it up.
Luckily, there is a way to offset the costs of a non-paying tenant or damaged property. Of course, you can never guarantee nothing bad will happen. But collecting a rental security deposit in Antioch will help.
Top Reasons to Collect a Security Deposit in Antioch
A security deposit is a lump sum of money that your tenant pays before moving into your rental property. It is not part of the first or last month’s rent, which you might collect upfront as well. Instead, a security deposit is in place to safeguard you.
If your tenant abides by the rules, pays rent each month, and doesn’t damage your rental, the security deposit is returned in full to them at the end of the lease term. If, however, there are damages to your property, you’re entitled to use the security deposit to cover the costs.
Of course, it’s important to remember that each state has their own set of rules and regulations regarding the collection, safekeeping, and use of security deposit funds. That said, collecting a rental security deposit in Antioch is crucial if you want to profit as a landlord.
1. Non-Payment of Rent
One of the worst things you can encounter as a landlord is non-payment of rent. This is especially true if you are still paying on the property.
If your tenant fails to pay rent, or abandons your property and disappears, you can use the security deposit to cover your losses. Just make sure you follow the laws in place if this happens. For example, if your tenant fails to pay rent, but still lives in your property, you will have to take serious action. This might include starting eviction proceedings. And until that is done, you won’t be able to use the security deposit.
2. Cleaning Costs
As a landlord, you should know that there will be some normal wear and tear on your rental when people live in it. But if you have an airtight lease agreement in place, it should be clear to your tenants that when they leave, the property is to be in the same condition as when they moved in.
There are many reasons why your rental property may need some extra cleaning at the end of a tenancy:
- Your tenants were messy and didn’t care for your property the way you’d hope they would
- Pets living in the property left messes and smells
- There was a family with small children living in the property and spills happened (as they often do)
- Your tenants were in your property for a long period of time and normal wear and tear turned into more
No matter the reason your property needs some extra cleaning, you can use all or part of the security deposit you collect to offset the cleaning costs. Just make sure to document the reasons and costs of cleaning your property. Your tenants have a right to know why their security deposit is not being returned in full.
Remember, there will be some out of pocket costs associated with cleaning in between tenants. You’re not legally allowed to use the security deposit unless there is a serious reason to.
If you’re not sure about the laws regarding security deposits in Antioch, make sure to enlist the help of an experienced property management company near you to help.
3. Unpaid Utilities
Sometimes your tenants leave at the end of their tenancy and don’t pay the last month’s utility bills. Then, when the time comes for you to transfer the utilities back into your name, you realize you have an unpaid bill.
This is where having a security deposit on hand is helpful. The last thing you want to do is foot the bill for your tenants every time they move out. If you’ve collected a security deposit, you never have to worry about this added cost or the hassle that comes with tracking down your old tenants to pay up.
4. Repair Damages
If you want to avoid having to pay out of pocket for damages to your rental property, it’s important to collect a security deposit in Antioch.
Imagine how many people visit your tenants throughout their lease term. For example, family, friends, employers, agents, and more can come tromping through your property at any given time. And if something is damaged, such as the structure of your property, an appliance, or even a furnishing you provided to your tenants, it is going to need to be paid for somehow.
With a security deposit on hand, you protect yourself from having to pay for damage to your rental. And while you can’t use these funds to upgrade your property, it will give you the peace of mind needed just in case something terrible happens.
5. Early Lease Termination
Whether you give your tenants the option to break their lease agreement early or not, having collected a security deposit is a good thing.
For instance, if you have an early termination clause in the signed lease agreement, you can use the security deposit per the state and local landlord-tenant laws. This will include help with excessive cleaning costs and damage to the property.
If, however, the lease doesn’t have an early termination clause, and your tenants decide to leave anyways, you may be entitled to use some or all of the security deposit to cover your losses. For example, you might be able to use the funds to cover finding a replacement tenant. This includes things like marketing your property as vacant, preparing it for new tenants, and any related fees associated with leasing your property.
Are you in need of Antioch Property Management? If so, get in touch with us today at Blue Line Property Management and see how we can help.
We are a full-service property management company serving Antioch, CA, and we know what it takes to ensure landlords generate the most revenue possible. Not only can we help you find high-quality tenants in 29 days or less, we can guide in collecting a security deposit to protect yourself in case the unthinkable happens. And to add to that, we will help you collect rent, inspect your property, handle maintenance and repairs, and so much more, so you don’t have to.