Upstate New York is a great place to rent out your property. Saratoga Springs has the highest renter population in the region, with over 44% of residents renting their homes.
While this leaves a large pool of great tenants to choose from, the opposite is also true. As a result, investors need to protect their investments. Here are the three most important things to know about security deposits as a landlord or investor!
The Laws About Security Deposits
First, you need to know the laws about security deposits in your area, as these can vary widely by state or municipality.
For example, here in Saratoga Springs, NY, the security deposit cannot exceed one month's rent, be used to pay rent, or be held for longer than 14 days after the tenant moves out. The first two are common across the US, but 14 days can be tight depending on your availability, as you would need to assess any damage and calculate the return within two weeks.
Moreover, it's important to understand the specific laws in your area regarding where you must hold security deposits, how to properly handle them, and more.
What You Can Deduct
Next, you need to learn what counts as a security deposit deduction. If something is considered "normal wear and tear" or somebody else's fault other than the tenants', you cannot deduct these expenses from their security deposit.
Normal wear and tear includes peeling or chipping paint, surface scratches, and small holes from hanging objects. Anything bound to accumulate over the years will not count.
However, you can deduct expenses for any major repairs outside of this. These include:
- Large holes in the wall
- Cracked windows
- Significant carpet stains
- Missing or damaged hardware
- Unwanted modifications to the unit (barring disability-related changes)
- Excessive cleaning job left behind
The list goes on. Anything that shows negligence on the part of the tenant resulting in costs to the landlord, should be covered by the security deposit. Read about New York tenants' rights to learn more.
How to Ensure Your Security
Finally, let's discuss how to ensure your security as a landlord or investor. Unfortunately, most of your options are preemptive. Once you have a difficult tenant, it's hard to stop them from causing damage.
For this reason, the best things you can do to protect yourself as a landlord are to:
- Find the right tenants
- Set the right policies
- Enforce policies over time
If you follow these three principles, then you're on the right track. If you hire the right property management services, they can help you draft a strong lease agreement, screen for the best possible tenants, maintain your property, and enforce policies over time. The best part is that a full-service property manager won't even take 10% of your rental income, but they'll cover 100% of the work!
Protect Your Property Today
Now that you know about security deposits, you can make the right decisions for your property to prevent a disaster. Again, you just have to think proactively and find the right tenants.
Stay up to date with our latest real estate news, and don't hesitate to contact us with any questions or for help with property management in Saratoga Springs!