What do you do if the tenants ruin my property?
Real Property Management’s tenant screening is so thorough, tenant damages are limited. However, even with the strictest of criteria, things happen.
The hope is that the tenant’s security deposit will cover the damages, but unfortunately the market has caused security deposit amounts to drop and in many cases there won’t be enough to pay for the damages. In that event, we get a judgement and collect the funds in small amounts over a period of years.
Basically, this concern is why our acceptance criteria is as strict as it is. It can take months of rent to cover the costs of one bad tenant. This is also why more and more property owners are turning to professional property managers to manage their rentals.
Why can’t I hold the security deposit?
The property management company is a neutral third party often licensed by the state to hold funds in trust or escrow accounts. It’s one of the reasons that tenants come to a property management company. In today’s economic environment, tenants want to make sure they know that their security deposit is safe.
Why can’t you dip into the tenant’s security deposit to pay rent? I have a mortgage to pay.
State Laws and the Code of Ethics that Real Property Management follows do not allow us to do so. The security deposit is the tenant’s funds being held in escrow to cover cleaning and/or damages to the property once the tenants vacate. However, upon move-out, we can also apply their deposit towards past due fees to include rents.