Before you rent out your property for the first time, take the time to outline all of the expectations you’ll have for your tenants. These terms will go into the lease, and they should include any upfront deposits you’ll expect a new tenant to pay. Knowing how much to charge a tenant in advance will ensure you remain consistent with each of your renters.
What Is the Typical Security Deposit?
In most cases, a property owner should charge the equivalent of one month’s rent as a security deposit. That amount should be enough to cover any damages that go beyond the normal wear and tear that results from the use of the unit. Alternatively, the deposit should be enough to cover the rent for one month if a tenant unexpectedly vacates in violation of the rental agreement or lease. The agreement should specify the amount requested as the security deposit.
When Should You Charge More?
In some cases, one month’s rent may not be sufficient as a security deposit. It’s usually a good idea to double the size of the deposit for a renter who has bad credit or unverified references. While you can give someone with bad credit a chance for a fresh start, make sure your own finances are sufficiently protected.
What About Pets?
You should never allow the security deposit to cover pets if you decide to allow tenants with pets. In that case, request a separate pet deposit and pet rent for each pet. Charge between $50 to $500 per pet for the deposit and up to $35 per month for the pet’s rent.
Need Professional Property Management Help?
Reliable Property Management provides services Maryland property owners can rely on to keep their rental units well-maintained. If you would like to learn more about our services, give us a call at (443) 869-3799.