Phoenix saw over 84,000 eviction filings in the past year.
If you're a Phoenix landlord, the last thing you want is to contribute to this statistic. Evictions are long, drawn-out processes that take a mental and emotional toll on everyone involved. Fortunately, there are ways you can reduce the likelihood of eviction.
One is to screen all applicants thoroughly. Another is to obtain security deposits from all new tenants. Today, we'll explain how security deposits work and how they can help you manage your property, so keep reading and protect your investment.
What Are Security Deposits?
Security deposits are a form of insurance landlords can use to protect their property from bad tenant behavior. You obtain them from tenants at the start of every tenancy, returning them at the end when you get the rental back in good condition.
If the tenant does anything to cost you money, you can compensate yourself out of the security deposit. Most of the time, this has to do with failed rent payments, outstanding utility bills, and property damage.
At the same time that you collect the security deposit, you'll likely perform a move-in inspection with the tenant. This involves making note of any existing damage in the property to prevent the tenant, as well as the landlord from paying for damage they didn't cause.
Arizona Security Deposit Laws
Every state has unique laws governing security deposits. In Arizona, the most a landlord can request for a security deposit is the equivalent of 1.5 months' rent. It's important to remember that the more your security deposit is, the lower your pool of qualified renters will be.
At the end of the tenancy, the landlord has 14 days to return the security deposit in full. If they're withholding some or all of the security deposit, they must give the tenant an itemized list of deductions.
How to Withhold a Security Deposit
Landlords must have a thorough understanding of what they can deduct from a security deposit. As mentioned earlier, it's missed rent, property damage, or any other lease violations that cost the landlord.
It's also important to know the difference between regular wear and legitimate property damage. Property damage involves things like large holes in the walls, broken glass, pet stains, and damaged appliances.
When you're withholding, it's in your best interest to thoroughly document the damage. If the tenant disputes your claims, you'll need to provide ample proof of their misdoings.
How Property Management Can Help
Security deposits help you protect your investment property, but they can also be difficult to deal with. Withholding a security deposit can create a contentious situation with an outgoing tenant. If that's something that causes you stress, it might be in your best interest to hire property management.
A property manager can deal with everything from tenant selection to eviction protection, including collecting and returning security deposits. At Real Property Management Phoenix Valley, we offer comprehensive property management services. Contact us today to learn how we can help you with your landlord duties.
