Wear and tear is bound to happen in your rental property, but how do you go about defining the difference between wear and tear vs tenant damage? This is important to know and understand when a tenant moves out and the unit is damaged, you need to know if you can or can’t use a security deposit towards damages. Read on as we define rental apartment wear and tear plus offer tips for a well-maintained property!
Defining Wear and Tear vs Tenant Damage
The chart below demonstrates the most common tenant damage and wear and tear.
How Much to Charge for Security Deposit
Under Maryland security deposit laws, a landlord can only charge two times the monthly rent for a deposit. Not all landlords will charge the maximum, though.
Keep these items in mind when setting a security deposit price:
- Upgraded Units: Is your property/properties recently renovated and/or have upgraded appliances? If so, you’ll want to charge more than in the past for a security deposit to protect the upgrades.
- Amenities: Are there additional amenities that could be damaged such as common spaces in a multi-family building? For single-family properties, is there a yard to take care of? If so, you may consider a higher security deposit to protect these items. If not, you can consider a lower but reasonable deposit to protect the property.
- Size of Property: The size of the property can impact the deposit. Larger properties have more space to take care of and more space to damage.
- Price: What’s the price of the unit? Price reflects what the tenant’s budget is and what they could afford deposit wise, but also helps to specify the value of the property. This is why the rent cost needs to be considered as well.
- Competition: Do your research and check out what similar competition is doing concerning deposits. If everyone is doing one month’s rent, keep that in mind as if you choose to do 1.5 months or 2 months, you’ll likely lose out on tenants compared to the competition.
With all the previous information in mind, what are some pricing options for how much to collect on the security deposit? Also, what are the pros and cons of each option? Read on!
Pros and Cons for Determining Security Deposit
- $500 is a standard and smallest price most landlords would consider for a security deposit. On a positive end, the lower deposit may attract more tenants and get a vacancy filled quicker. However, on the negative end, $500 isn’t a lot. If they damage the unit, you’ll be short of the money needed to fix those damages.
- One month’s rent is another option and one of the more popular options. It’s good because it is generally low enough to attract tenants but more qualified tenants than if it were $500. It’s also generally enough for damages at the end of the lease if needed. There aren’t cons to this option apart from the fact that you may receive some push back.
- 1.5 – 2 months’ rent amount as a deposit is your third and final option. This option is plenty to cover minor damages and bad damage. It also ensures quality tenants that have the money to make rent monthly. Keep in mind, this option will get the most push back and possibly take longer to fill vacancies.
Tips for Maintaining a Property
- Regular inspections: Inspections can be time-consuming and tedious, but are necessary. Move-in and out inspections note pre-existing damages plus damages before the tenant moved out that go above wear and tear and will be taken from the deposit. In addition, drive-by inspections at least every six months and regular inspections every 3-6 months are important to check on the condition of the property.
- Regular maintenance: After performing inspections, complete any needed maintenance as soon as possible. Letting maintenance issues linger can cause them to get worse and cost more money and problems in the end.
- Keep in touch with tenants: Stay in touch with tenants to be sure they are reporting maintenance issues as/if any come up.
- Have solid vendors on deck: Have a few good maintenance vendors on deck to outsource to as needed. Having relationships with vendors prior to issues arising will make things go smoother.
- Cleaning and turnover process: Finally, have a good turnover process in place that involves a deep clean and carpet cleaning or replacing. Touch up paint or repaint entirely when needed. Staying ahead of this between every move-out will keep the property well maintained and make new tenants happy.
Regular maintenance is key; however, it doesn’t have any impact on how a tenant will treat your property. That said, a security deposit needs to be able to cover the damage that goes above and beyond wear and tear. Keep these helpful tips in mind for defining wear and tear or consult a Howard County property manager for assistance with rental property maintenance, damages, and more.