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Security deposits are one of the best ways to protect your property investment.
When you select a tenant to live in your rental unit, you expect them to take care of the property. To protect your investment, you'll have them sign a rental agreement that ensures they pay rent on time and do not cause any damage to the unit.
You can take this one step further in Georgia by requiring security deposits when your tenants move in. Today, we'll take a look at security deposit laws and how you can and should use a security deposit for your rental property.
Don't take chances when it comes to a rental. Keep reading and learn everything there is to know about security deposits.
How Do Security Deposits Work?
A security deposit essentially gives a landlord financial assurance that a new tenant will respect their property. When the tenant moves in, they pay the first month's rent with an added fee that acts as the security deposit.
The way it works is, upon moving in, the tenant will do an inspection and make note of any existing damage in the property. When they move out, they'll do another inspection and if there's any new damage, it comes out of the damage deposit.
If there's no new damage and the person has been an exemplary tenant, they'll get the security deposit back in full. It's a cut-and-dry way to ensure a tenant doesn't damage your property or miss rent payments.
Move-In/Move-Out Inspections
When you conduct these types of inspections, it's important to have a checklist handy so you don't miss anything. Both you and the tenant should have a copy of the inspection in the event that there are any disputes later on.
You'll simply walk through the property and note any existing damage, such as carpet stains or holes in the wall. As a landlord, it's important to understand what constitutes real damage versus normal wear and tear.
Generally, things like faded paint, floor scratches, loose taps, and cracked door frames are wear and tear. Damage is more severe, such as broken appliances, burnt carpets, holes in the wall, and anything that costs significant money to repair.
Tenants' Rights in Georgia
In Georgia, you must return the security deposit within a month of the lease termination. If you don't, you could incur fines and potential lawsuits from your former tenant.
Withholding security deposits is accepted, but you need to provide documentation. You'll need to provide clear proof of the damage and receipts noting how much it cost to repair the damage. You can only withhold for the cost of repairing the damage and the remaining deposit should be returned.
How PMI Can Help
Dealing with security deposits can be tricky and uncomfortable. You never want to make a big deal about a little bit of damage in your unit, but you shouldn't let a bad actor get away with intentional damage to your property.
Another option for landlords is to leave it all up to the professionals. A good property management company can handle all tenant relations, including tenant selection, eviction, and dealing with security deposits.
PMI provides Georgia's premier property management services. Contact us today to learn how we can help you deal with tenants and maximize your property investment.
