How Much For A Security Deposit?

Comments(11)

• 
  hibby7628th July, 2004

  There are several thoughts on this....
  
  1. As much as you can get
  
  2. 1-3 months rent (see #1)
  
  Some people do first and last months rent. I'd prefer to do the last months rent as a security deposit rather than the last months rent. That way you get the money if they leave early OR if they mess up your place.
  
  In my area our housing market is pretty soft, and so there are a lot of $99 deposit deals going around.

• 
  mattfish1128th July, 2004

  I agree on "as much as you can" - ther is no telling how much damage a tenant can do...
  
  In New Jersey the maximum you can take as security deposit is 1 and a half months rent... This isn't enough in my opinion, but its the most I can take.
  
  Good Luck!
  [addsig]

• 
  bgrossnickle28th July, 2004

  You need to charge what ever your competitors are charging. Call on a couple for FOR RENT signs in the area and find out if they charge. As with any business, you need to be price comparable to your competitors.
  
  Brenda

• 
  dstudeba28th July, 2004

  I would say avoid at all costs the $99. The one time I did less than 1 month's rent I regretted it. They need to have a reason to keep your place in good order. What if the accidentaly do $100 worth of damage in the first month they are there? They know they aren't getting the deposit back so they feel free to do anything else to the apartment. Plus if they skip out on the last month's rent, at least you have the security deposit. (remember to put it in your lease that the security deposit can be withheld for failure to pay rent, if allowed in your jurisdiction)

• 
  sharpREI_PA28th July, 2004

  Hey,
  Thanks for all your replies here. This atleast gives me something to go by.
  
  Thanks again
  
  Chris

• 
  TaraG28th July, 2004

  My 2 cents...
  I get one months rent as a security deposit from my tenants. That amount I believe is enough to feel substancial to a tenant without being so much that it becomes the deal breaker. For example, the lease is for $1100. I know some landlords look for 1st & last months rent, AND a security deposit of one month's rent! In this case that's $3300! If, when I was renting, I had $3300 available in a lump sum like that, I wouldn't have been renting - i would have used it as a down payment on a house. (Which is exactly what I eventually did.)
  
  It's obviously important to cover your back - but I think it's also important to send the message to tenants that they are trustworthy. If you suspect they will be irresponsible, don't rent to them to begin with. I realize this may create a certain amount of risk for the landlord, but more often than not I think a certain amount of trust in the transaction results in a more respectful relationship throughout and a greater chance of renewing the lease agreement at it's end. Also, it establishes your reputation as fair and increases your chances of receiving positive referrals from previous tenants in the future. All comments welcome...

• 
  Bob230th July, 2004

  The rental market in metro Atlanta is slow. Brainstorming with some other landlords and my son (who is a tenant), I decided to reduce my security deposit a little. Many of tenants don't have a lot of up-front cash, and they may be waiting on a refund of their deposit from the place they just left.
  
  So, for example, when the rent is $1000, I am asking $800. Not a lot additional risk to me, but some concession to the tenant.

• 
  3qu1ty31st July, 2004

  I charge less than a month's rent for a security deposit unless there is a pet involved then the pet deposit brings it up equal to a month's rent. I look for good inexpensive handymen and pass he savings to the renter. It makes it a little less daunting for them and more attractive for the unit.

• 
  maxwellpropertyinvestment31st July, 2004

  We use one months rent plus half. Example: $1000. rent = $1500. deposit.

• 
  rvrnorth1st August, 2004

  Security deposits are the variable in today's market. High deposits scare some people away. I look at the costs to evict and take that into account. 1 1/2
  is usually sufficient, but if the market is soft, 1 month. Scheduled payments for the extra security softens the blow for some.

• 
  NewKidinTown1st August, 2004

  Your local landlord-tenant laws may restrict the amount you can charge as a security deposit. In this area of MD, I can not charge more than two months rent as a security deposit. Collecting first and last month's rent in advance is also prohibited.