How to Determine Reasonable Security Deposit Fees

As a landlord, at some point you will have to determine what your security deposit fees are. The security deposit gives you assurance that your property will be taken care of. If it is not taken care of, you can help alleviate the financial burden with the deposit fee. It is designed to keep everyone in the agreement honest. Sometimes, it is difficult to determine how much your security deposit should be. Here are a few tips to keep in mind when you are setting your security deposits.

Market Rate

One of the first things that you should look at is the going rate in the local market. Find out what other landlords are charging for similar units. This will give you a range that you should work within. If your deposit is much higher than everyone else's, you may have a hard time finding renters.

Comfort Level

After you have a range of prices to work with from the market, you will want to set the price at wherever you feel comfortable. Try and figure out how much it would cost to make average repairs on the property and make sure that the deposit will cover that amount.

Lastly, be sure to research landlord-tenant laws so that you are certain you are not overcharging.

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