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Real estate invoice for Security

hey renter retires it's adam schrader here and today we're going to talk about how to deal with security deposits all right before we get started i want to remind everybody please subscribe to our youtube channel and click the notifications bell and don't miss out on any of these videos we're putting out as often as we can to make you the best investor you can possibly be and as always at the end of the video if you've liked it click the like button and if there's anything you want to ask or say or any other videos you want us to you know make leave it in the comments below and we'll get to it as soon as possible so i mentioned today we're going to talk about the security deposit now i'm sure that everybody here probably knows what a security deposit is but let's go over it real quick a security deposit is simply something your tenant puts down at the beginning of their lease to say if something happens to the property this is the money that's going to cover the damage whenever i move out and you hold it for right now most states have limits on how much you can charge so if you're doing this yourself if you're self-managing your property make sure to look up your state's restrictions so that you're not over charging your tenants because that can put you in a very bad position later on but let's say you're not doing this and you have a property manager like we recommend and you put it in there and the property manager you know puts the security deposit in their account so they have it for whenever the tenant moves out here's the part i really want to talk to you about and i can't stress enough most property managers tend to err on the side of giving the money back to the tenant so what's really important is in most places you have about 30 days to go over what is wrong with the property based on what the tenant did and get it repaired and get the invoice so you can deduct that from the security deposit so here's what i want you to do every single time your tenant tells you they are not renewing their lease the first thing you need to do is contact your property manager and say do not send them their security deposit back until we have checked out the property because as soon as they send that money back to the tenant and they have it it gets a lot harder to get that money back you're gonna have to go and get a judgment against them most likely to get them to pay obviously you're going to send them a bill if you have to do something but the likelihood is they're just going to ignore that bill which will then mean you have to take them to court to get them to pay so first thing off contact your property manager and say do not give them their money back until we have verified that everything is good the second thing you're going to need to do is tell the property manager that same week that they move out get somebody in there to evaluate the property to do a walk through to make note of what needs to be done make note of everything that happened over the term of their lease because while you can't charge them for normal wear and tear you know if they've lived there for five years and the carpet's a little worn down you can't really do anything about that but if there's a huge red stain in the middle of the room from you know spilling a bottle of wine that is something that you can you know potentially have them cover when it comes to fixing the damages i've had for example in one of my properties when we did a tenant turn they hadn't touched the yard in the backyard at least for a long time based on the look of it and it was overgrown to the point where we had to pay somebody to come in hack it down and take stuff away if i hadn't called my property manager and told them not to release the money they were getting close to doing it and so thankfully i had called them and said hey don't release it let's check the property before you send it back and why wouldn't they charge them why wouldn't they look it over because they want to keep a good relationship with this tenant so that if they ever come back they might lease another place from them don't get me wrong i'm not saying that makes property managers bad but they err on the side of keeping the tenant happy for their future business so when it comes down to it you're going to get your essentially inspection report back from your property manager you need to go over with them what is considered normal wear and tear and what you can actually charge them for and then you need to make sure and then once it's done you deduct that amount of money from your tenant and their security deposit and then you give them the money back but please please i am begging you do not just simply not say anything to your property manager and then find out three weeks later there's damage done to the property and you have to start going after your tenant because that will make your life a whole lot harder make sure that you are preparing as soon as you find out that your tenant is leaving your property you need to start preparing and one of the things that that involves is making sure monetarily you're okay and also making sure that you have enough in there at the beginning to handle any damages that might happen so consult with your property manager make sure that they are charging enough for security deposit to make you feel comfortable but also that is within the rules of the state when it comes to actually you know following the law which we always want to do of course so i hope this video has been helpful if it has please click the like button don't forget to subscribe to our youtube channel so you don't miss any of these videos and don't forget to check us out at rent to retirement.com that's rent to retirement.com you can see all of our inventory there you can schedule a call with one of us investment strategists and we can help you plan out your real estate journey whether that's just getting started or whether you've been investing for years and have 100 properties under contract and in your portfolio that's rent to retirement dot com you can see everything there schedule a call we'll get you hooked up with whatever you need for your real estate portfolio i really appreciate the time that you're spending putting into your real estate journey to educate yourself i'll see you on the next video thanks for watching the rent to retirement youtube channel check out some of our other videos like this one or this one here [Music] you