Only 41% of tenants get their full deposit back when moving out, which means landlords must know how to use them as a security measure.
Collecting security deposits protects your investment and gives you leverage over bad tenants. But because these laws vary between states, you may be unfamiliar with how to use security deposits in North Carolina.
Sounds like your situation? Luckily, you've come to the right place. Here are three things to know about security deposits.
1. Deposit Limits
Before we dive into the article, it's important to know why landlords collect security deposits. Deposits are often used to cover a missed payment or an early termination of the lease agreement. It also acts as insurance to protect your investment against property damage.
But the most important thing about security deposits in Goldsboro is the limit.
Unlike other states, North Carolina landlords can only charge a specific amount, depending on the type of lease. For instance, for a weekly lease, landlords can collect two weeks' worth at a maximum. Or, if it's a monthly rent, landlords should receive two months' rent for their security deposit.
It's also possible to collect pet security deposits before a tenant rents the property.
2. Properly Store Your Tenants' Deposits
Before investing in Goldsboro real estate, landlords should know how to store their deposits.
Most landlords in Goldsboro real estate, North Carolina, store deposits in a rental trust account. This keeps security deposits and tenant payments separate from the business account to avoid any complications. If you use a property management company, they will open an account for you.
Another option is storing the deposit as a bond. Many insurance companies accept this as long as it's worth the same amount as the security deposit. By North Carolina law, the landlord must then inform the tenant within 30 days after their lease begins.
3. Know When to Return the Security Deposit
If you've collected a security deposit for real estate in Goldsboro, North Carolina, you must return the security deposit 30 days after the tenant moves out. Note, that landlords who have made deductions must give a list of reasons in writing alongside the remaining chunk of the deposit.
Knowing when to return security deposits can be stressful if you own many properties. Because of this, it's wise to hire a property management company to oversee your real estate in Goldsboro, so that you're not liable for any missed payments.
Many landlords wonder if the deposit can be used as the final month's rent. Although this is rare and isn't supported by North Carolina law, it is possible. If it's mentioned in the lease agreement and both parties agree, tenants can use the deposit instead of rent.
Our Top Tips About Security Deposits
Now that you're an expert on security deposits in North Carolina, the process will be far easier.
If you have any problems, we at Flagship Realty Group can help you navigate the market and land quality tenants. Contact us here and we can discuss the first steps to take.
