Should I require a security deposit on my house in Chattanooga?
Alex here with another edition of Questions Owners Ask. Today’s question is, should I require a security deposit on my house in Chattanooga?
The answer is you should always require a security deposit for your house.
Security deposits help mitigate some of the risk in bringing a tenant into your house for at least 12 months.
About a year ago, one of our owners decided not to require a deposit while marketing her house. Now we are having to evict the tenant.
When we were able to go into the house, we found $3,000 worth of work to be done. If there had been a security deposit, it would have provided the owner with a safety net.
However, even if you choose to require a deposit, you are not eliminating the risk of potential work when the tenant moves out. But if that does happen, you’ll at least have some semblance of a safety net.
At gkhouses, we require a security deposit equal to one month’s rent, which is industry standard. We’ve never had any pushback from potential tenants on that amount.
If somebody’s credit score falls between a 480 and 519, we require a double deposit as long as they’re not Section 8 and the rent is below $800. This gives a broader safety net for some of the more potentially risky tenants.
The decision is ultimately up to you, but make sure you weigh all of the risks involved before you decide against a security deposit.