Hey, everybody. Alex Smith here from the Gkhouses office in Chattanooga.
This is another edition of “Questions Owners Ask.” And today’s question is, should I require a security deposit on my house?
The answer is you 100% always should require a security deposit for your house.
The reason being is that it helps mitigate the risk, some of the risk, you know, that you’re taking on in bringing a tenant into your house to live there for, you know, at least 12 months.
We had an owner about a year ago that made the decision to not require a security deposit while her house was on the market. And then, here we are a year later having to evict the tenant.
And then, once we got in there and saw the condition of the house, there was $3,000 worth of work to be done. So, the security deposit, you know, helps create a safety net.
So, for this particular owner, there was a lot of work to be done to the house, and there was zero safety net for this particular owner, unfortunately.
And, you know, even if you do require a security deposit, you’re not necessarily eliminating the risk of there being that much work when the tenant does move out.
But when the tenant does move out and there’s that much work to be done, you’ll at least have some semblance of a safety net.
What we typically require is we require one-month security deposit.
That’s industry standard. I’ve never had any pushback from potential tenants on that security deposit amount.
Another thing we do is if somebody’s credit score falls between a 480 and 519, we require a double security deposit as long as they’re not Section 8 and the house is less than $800 a month.
So, that’s just one thing we do. That’s what I would recommend for you if you were looking at doing something like that.
But this has been another edition of “Questions Owners Ask.” Thanks, everybody. Have a good day.