There's nothing easy about being a landlord in Virginia.
Over a third of households in the state are occupied by renters. On the surface, this is great for business for Virginia's landlords. With a larger pool of tenants, however, there's a greater need to protect yourself.
Even with fantastic tenant screening practices, you never know what kind of tenant you're getting until they're living in your unit. For that reason, it's important to use security deposits as another form of insurance.
Today, we'll give you a quick guide on security deposit laws and tenant rights as they relate to security deposits. If you're new to this subject, read on and you'll have all the information you need to protect your investment.
The Point of Security Deposits
As mentioned, security deposits act as a form of insurance for the landlord. In the event the tenant damages your property or fails to pay rent, you'll have the security deposit to draw funds from.
Typically, you'd collect the security deposit at the very beginning of the tenancy. The specifics of the amount and nature of the security deposit should always be outlined in the rental agreement.
Security Deposit Laws
A lot of landlords wonder how much they can charge for a security deposit. In Virginia, you can charge up to the equivalent of two month's rent as your security deposit, but no more.
Many states have no laws on this matter, giving the landlord the freedom to charge whatever they want. It's important to remember that the more you charge for your security deposit, the more likely you'll drive perfectly qualified tenants away.
The only other security deposit law that you need to abide by has to do with your records. In the event you've kept some or all of the tenant's security deposit, you must record exactly what it was for and make that available to the tenant. It's good practice to keep receipts, in case the tenant tries to dispute your claims.
It's incumbent upon you as the landlord to keep your tenants as informed as possible regarding their security deposit. Firstly, you should always do a move-in inspection at the start of the tenancy, followed by a move-out inspection at the end. This allows you to make note of any existing damage in the unit, and then any new damage at the end of the tenancy.
Another thing you can do for your tenants is have an accountant put the security deposit in an interest-bearing account. When you return it with them, they'll get a bit more than they put in. Many states require landlords to do this - not Virginia - but it's a nice gesture nonetheless.
How Property Management Helps
Dealing with security deposits can be added trouble for landlords, but they're necessary to ensure your property is safe. Most tenants expect to pay security deposits these days, but it can be helpful to have a property manager help you collect them.
At PMI Lynchburg, we can help you with all things relating to your rental property. Whether you want us to screen tenants, maintain your units, or collect a security deposit, contact us and we'll tell you how we can help.