Making friends. Finding your future wife. Finding the best locations.
There are tons of traits that people want to find in a good city. Yet, what people don’t realize is that the best traits in cities already exist within them.
Phenomenal housing prices come as a perk of these affordable cities as well. However, one can argue that one of the best traits would be their lax landlord policies and knowing what is a security deposit when renting a property.
Yet, even with lax policies, a good landlord can still stoop to low levels to line their pockets. With this in mind, it’s essential to educate yourself on the facts about security deposits and the true definition of one.
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So what is it? Keep reading to find out.
What Is a Security Deposit When Renting?
A security deposit is a type of deposit that is paid by the tenant to the landlord at the beginning of the tenancy. The amount of the deposit is typically equal to one month’s rent but can vary depending on the landlord and the type of property. They may also cover the first and last months’ rent as well as any other expenses.
The deposit is held by the landlord and can use to cover any damages to the property that are caused by the tenant during the tenancy. If the tenant causes no damage to the property, the deposit is refunded to the tenant at the end of the tenancy.
When Do I Pay My Security Deposit?
You can pay your security deposit upfront when signing a lease. Security deposits are often payable by cheque, money order, or online. Your landlord may provide you with a security deposit guide with payment details.
How Much Is a Security Deposit?
Typically, the security deposit will be equal to one or two months’ worth of rent. For example, you would need $1,500 on hand for the security deposit if your monthly rent is $750 and your landlord needs the first and last months’ money as the deposit.
Why Do Landlords Collect Security Deposits?
Most landlords require a security deposit because it gives them peace of mind in knowing that they will compensate for any damages caused by the tenant.
It also ensures that the tenant will not simply walk away from their lease without giving proper notice. In some cases, the deposit may also use to cover the first month’s rent.
What Happens if Damages Are More Than My Security Deposit?
If your damages exceed your security deposit, you may be responsible for paying the difference. Your security deposit is intended to cover any damage or cleaning that may be necessary when you move out.
If you have caused damage that exceeds your security deposit, the landlord may require you to pay the difference.
Of course, when you have to pay a security deposit, you have to know more about Security Deposit Insurance.
Key Takeaways About Security Deposits
So, what is a security deposit when renting? A security deposit is a sum of money paid by a tenant to a landlord at the beginning of a tenancy.
The purpose of the deposit is to protect the landlord in case the tenant damages the property or fails to pay rent. Security deposits are typically equal to one month’s rent.
For more information about things in life, check out some of our other articles on the subject.