Security deposits might not be ideal for tenants, but they can protect landlords. Quality tenants won't mind paying security deposits for a great place to live.
If you want to find the best tenants who won't damage property and who will pay rent on time, consider charging security deposits. Before you do, you need to know about the must-follow laws in Lynwood, Washington.
Keep reading to learn them and how a property management team can help.
How Much Can You Charge for Security Deposits?
In Lynwood, Washington, there is no limit on the amount a landlord can charge for a security deposit. A landlord can charge whatever amount they see fit.
As a good rule of thumb, consider charging the equivalent of one month's rent. If you believe a tenant is risky, you may decide to charge them more to protect yourself.
If you want to attract quality tenants and increase lease renewals, charge a fair security deposit amount.
Collecting Security Deposits
Before collecting security deposits, you must create a written checklist to document the property's condition before the tenant moves in. Both parties must sign this document.
If you fail to include this checklist, you might face penalties, including returning the entire security deposit amount.
Security deposits can protect landlords, but you don't have to collect them yourself. A professional property manager can inspect the property, create the checklist, and have the tenant sign it.
Managing Security Deposits
Washington State tenant-landlord laws provide landlords with three options to manage security deposits. A property management company can help you with any of these three storing methods:
- Keep the security deposit with an escrow agent
- Keep the security deposit in a nationally recognized financial institution
- Keep the security deposit in a trust account
Security deposits must be separate from other rental property finances.
Returning Security Deposits
Once a tenant vacates the rental property, the landlord has 21 days to return the security deposit. Since security deposits are designed to benefit landlords and increase rental income cash flow, you might not be required to return the full amount.
If you return a partial deposit to the tenant, you have to explain the deductions and their costs. A security deposit return notice must be detailed to avoid penalties.
The best landlord advice is to hire a property management company that knows the local laws regarding security deposits. Failure to follow the rules could result in a lawsuit where you are forced to pay for legal fees and up to twice the deposit amount.
Hire a Property Manager in Lynwood, Washington
Security deposits can be complicated if you don't understand the laws in Lynwood, Washington. With the help of a full-service property management company, you don't have to worry about penalties.
At PMI Brewder Realty, we have been helping local landlords since the 70s. With our knowledge of the area, we can craft a rental property management plan to make your investment a success.
To understand security deposits in your area and talk about additional property management services, contact us now.
