While property management is about working with properties and people, managing property involves a lot more paperwork than some think. It takes time and effort to help your properties run smoothly. Processing security deposits is one area where you can't afford to make a mistake. How can you ensure that you effectively keep track of your tenants' security deposits?
The Laws Around Processing Security Deposits
When you receive a security deposit, you do so to safeguard your property. You're making sure damage caused to the home will be covered by at least a nominal amount of money that's put forward by the tenants at the beginning of the rental contract. A security deposit can also help reduce the financial blow if a tenant leaves a lease early. Each state has different laws around security deposits. Sometimes state or city laws surrounding the total amount of the security deposit, and there are laws about when the landlord must return the deposit to the tenant. For example, in Alabama a landlord must return the deposit to the tenant within 60 days after the lease has ended and the tenant has moved out. In other states such as Louisiana, the landlord has only one month to return the deposit.
Track Tenant Details Such as Location
A Houston Chronicle article sums up the dilemma for property managers, stating that "individual states, as well as local communities, set their own laws governing security deposits, so no hard and fast rule governs all rental relationships." If you're managing multiple tenants in multiple cities and the laws about deposits vary from place to place, you need to make sure you follow the law, wherever your tenants live. Rental software can help you track your tenants' location and the relevant security deposit amounts and return deadlines so that you'll be accurate in your requests.
Use Software to Track When The Security Deposit is Due
When it comes to security deposits, you have a legal obligation to return the deposit to your tenant in full unless work needs to be done to repair the home. You also need to return the deposit on time. Tracking your tenants and when you need to return their deposits with software means you don't need to keep all of this in your head or in a planner: your computer system can help remind you that it's time to send back the deposit.
Watching for Financial Trends
During certain seasons such as the beginning of the school year, you may have a larger inflow and outflow of tenants from your properties. At these times, it's particularly important to ensure you're financially able to manage your tenants' security deposits. Rental property management software helps you see these trends and ensure that your finances are prepared for tenants to depart at any time.
Detailed data management is one of the most challenging aspects of property management.
Track Repairs and Disputes Using Rental Property Management Software
You don't want to get caught in a dispute over needed repairs to a property, but sometimes it happens. A tenant may feel a certain damage is a result of normal wear and tear or argue that the problem existed long before they moved into the property. To avoid disputes or lend more credence to your argument, you need to document repairs that have been made to the property. As you prepare a property for a new tenant, use rental property management software to document repairs that are completed so that you can show that everything was in good working condition when the tenant began the lease.
According to Forbes, many small businesses are afraid to purchase software because they "lack the resources to make sure the technology is customized and adopted." This makes it even more important to find software that's designed for the specific kind of work that you do. Managing rental properties requires impeccable attention to detail. When you're looking for software, choose a high quality rental property management software such as Propertyware. Sign up for a free trial today.
“As your partner in success Propertyware provides you with the tools you need to optimize your business controls.” – Rob McCollum