Unless otherwise stated in your local or state laws, a landlord can charge as little or as much as they want for a security deposit. The standard security deposit is equivalent to one month's rent.
You are not required to ask for any security deposit at all, though not charging a security deposit would not be advisable in any circumstance. It's much harder to try to collect funds for damages, or for not fulfilling the terms of the lease, after a tenant is already gone. If pets are allowed in your building, it's advisable to ask for an appropriate additional "pet deposit." Animals can be fine tenants, or can be quite destructive. At the very least you will most likely have to clean carpets or refinish flooring come move-out time.
Conversely, you don't want to ask for so large a security deposit that you scare away good prospective tenants. Good tenants won't necessarily have large amounts of cash for a deposit, and you might be missing out on moving someone in that could be a steady, reliable source of income for your property.
In the litigious world we live in, a landlord should pay careful attention to what questions he or she asks a prospective tenant. Remember to keep it to the facts, and make sure all questions pertain to a tenants ability to pay rent and adhere to the rules and regulations of the building. Any questions that can be construed as discriminatory are strictly prohibited by the US Department of Housing and Urban Development, otherwise known as HUD. Below are some guidelines set forth by HUD:
HUD clearly states that no one may take any of the following actions based on race, color, national origin, religion, sex, familial status, or handicap:
What can you ask an applicant? Questions pertaining to:
You also are expected to require proper identification such as a driver's license and social security card. And it is appropriate and expected that you make sure your tenant is able to follow established rules, such as a rule against having pets in the building.
Practice good common sense in your screening process. Keep it professional, since leasing out your property is, above all, a business transaction and you'll protect your future tenant and your self in the process. To take your business to the next level, perhaps it's time to think about a hiring a property management company to handle all of this for you. Contact us at www.GoldenEstateManagement.com when you're ready to take that step.
Mortgage giant Freddie Mac reported on Thursday that mortgage rates fell to an all-time low of 4.78% this week. That's a more than a full percentage point difference from rates a year ago. If you, or your clients, have been considering when to buy, the time is now!
Lenders have tightened their standards considerably compared to lending practices of a year ago, so loans with the most favorable rates are available to buyers with solid credit.
There's even more incentive for first-time home buyers, with a Federal Tax Credit of $8,000 available to those who purchase before the end of the calendar year. For California buyers, there is the further protection of a newly instituted C.A.R. Housing Affordability Fund Mortgage Protection Program (C.A.R.H.A.F. MPP). Through the fund, a first time home buyer who finds themselves lay-off from employment may be eligible to receive $1,500 per month, for a period of six months, to assist them with mortgage payments. A qualified co-buyer may receive up to $750 each month for the same six month period. The plan also includes accidental disability assistance and a death benefit up to $10,000.
According to C.A.R., to qualify for the Mortgage Protection Program, applicants must:
•· Be a first-time home buyer - someone who has not owned a home in three or more years
•· Open escrow April 2, 2009, or later, and close on or before Dec. 31, 2009
•· Use a California REALTOR® in the transaction
•· Purchase the property in California
•· Be a W-2 employee (cannot be self-employed)
Contact your Realtor for an application for this greatly beneficial program.
Low interest rates to those who qualify, high inventory, motivated sellers, tax benefits and protection from the state of California are all greatly encouraging factors for buyers in this market.
If you haven't already heard, the California Association of Realtors and the Los Angeles Times is sponsoring The Southern California Home Buyer's FairApril 18th and 19th at the downtown Los Angeles Convention Center.
And here is what I love most about this upcoming weekend event...the stated objective: To address and alleviate fears about the current real estate market through educational "how-to" seminars on the home buying process. Knowledge is power! And if you, or your clients, have good credit and a modest down payment you may qualify for an amazing loan right now. Rates are the lowest they've been in decades, inventory is the highest it's been in years, and prices have dropped considerably.
The media loves to prey on our fears. The daily turn of events in the overall economic climate is regularly sensationalized in the national and local news. It's on television, it's on the radio, in the (albeit struggling) newspapers. It's everywhere. So turn off that t.v., and get to this weekend of real estate information brought to you by experts in the field.
For more information, log onto www.homebuyersfair.com.
And it's free!
Whether accepting or rejecting prospective tenants, it's always important to put it in writing. The initial news may be given over the phone, however you should always be sure to follow up with written correspondence, whatever the message you are conveying.
If you reject a prospective tenant based on information gathered from a Credit Reporting Agency, the Fair Credit Reporting Act (FCRA) requires a landlord to send written notice informing the applicant of the reason for the "adverse action" of not offering tenancy in the building. They applicant then has the right to obtain a consumer report from the agency used, the right to dispute any inaccurate information about themselves within the report, and the right to request more information from the landlord if the refusal was based on information other than what was found in the consumer report. Such information may include insufficient income to cover the cost of rent. If that is the case, make sure to state that in your refusal letter.
For more information on the FCRA, a couple good websites to reference are www.rentlaw.com, and www.landlord2landlord.com.
And on a more positive note...if you are accepting an applicant, it's also advisable to follow up a verbal acceptance with a written one. In this correspondence, include the basic terms of the rental agreement such as length of the lease term, move-in date, the amount of the security deposit, amount of rent, and any other information that is meaningful to your agreement. No need to include every detail of the agreement (that's what the actual lease is for) but you should state the full amount of money required to accept occupancy and the date that confirmation and deposit are due.
Of course, if you'd rather focus on other things in your business and life and would like to hand such operations over to a professional and reputable company, contact us at www.GoldenEstateManagement.com. We serve the communities of the greater Los Angeles area, Fort Worth, Texas and Oklahoma City, OK.
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Out of Keller Williams Beverly Hills, serving the residential and commercial community, with years of experience, and a relentless passion for Real Estate. Always holding clients interest first.
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