Security deposits and rent collection—these are two of the most crucial and sometimes daunting tasks a landlord has to manage.
Thankfully, collecting rent is easier now than ever before, giving you plenty of options. Taking security deposits is also a straightforward process, especially with the right property management company on your side.
Here are our three expert tips on how to make the process of handling security deposits and the first month's rent collection easy.
1. Know the Laws
As an owner or investor, you need to familiarize yourself with state laws on security deposits, rent, and other move-in fees. For instance, what is a security deposit and how is it different from the first month's rent?
Here in Texas, the application fee, security deposit, application deposit are all different payments. Each has separate protections you need to understand.
Tenants will often ask about a security deposit refund when they move out. Failing to follow the law regarding security deposit refunds can result in legal action.
Currently, there is no statewide law that restricts how much landlords can increase the rent after a lease renewal. However, certain cities may have ordinances in place.
Texas law allows landlords to charge and collect reasonable late fees if tenants do not pay rent. That said, it's important to understand what the state considers reasonable fees. You can find out more in Section 92.019 of the Texas Property Code.
2. Be Clear About Security Deposits and Rent
There should be no ambiguity when it comes to talking to your potential tenants about rent and the security deposit. You should also be clear about any pet deposits or additional pet rent.
Discuss the lease terms with them. Make the rental amount obvious, so they know what they need to pay each month. Make sure they understand the security deposit is separate from the first month's rent.
When you collect the first month's rent and the security deposits, make sure these are separate payments.
3. Use Property Management Services for Rent Collection
Rent collection can be a major hassle. After all, what do you do when a tenant doesn't pay on time?
Property managers can make the process so much easier. They have a firm grasp of tenant law and know what to do when a renter misses the grace period outlined in the lease.
Rental property management services ensure that your tenants will pay rent on time, and when they don't, we take the necessary steps toward issuing a vacate notice and filing for eviction.
Having someone in your corner takes a lot of stress off of you, and streamlines the rent collection process. Plus, you can take advantage of other services, such as tenant screenings, maintenance and inspections, and more!
Make the Most of Your Property
Handling rent collection and security deposits can be a hassle, and a legal issue if you're unfamiliar with local laws. However, these three tips should put you on the right track.
At Precision Realty, we understand you have a lot to handle from rental property accounting to lease enforcement and more. We want to help. Send us a message or call us today to learn more about our property management services here in Houston.