The Ohio real estate market saw an 8.9% increase in the median house price between October 2023 and October 2024, showing that it has a lot of potential for real estate investors. If you own rental properties here, you can make a good income, but you need to make use of effective strategies.
To do this, it's crucial to have a good understanding of rental property practices. Security deposits are often somewhat misunderstood, but if you don't handle things correctly, you could face some serious issues.
In this landlord deposit guide, we'll cover some crucial things that will help you succeed in the Mallison, OH, rental market. Let's get started.
What Is a Security Deposit?
A rental security deposit is a sum of cash that landlords collect from tenants at the start of their rental lease. It acts as a safety net for the landlord to prevent the tenant from backing out of the lease agreement.
At the end of the tenancy, you'll return the deposit to the tenant. However, you may make deductions for issues such as property damage or unpaid rent.
How Much Should Security Deposits Be?
In some states, there are security deposit limits. However, Ohio (like some states) has no such limit. Technically, you can ask for as much as you want for a deposit - but that doesn't mean you should.
If you request an excessive amount, it will put potential renters off. As such, the standard rate of one or two months rent is generally a good practice to follow.
Bear in mind that some towns and cities have their own local laws surrounding security deposits, and these can change with time. It's a good idea to work with a local property management company as they stay up to date with such laws. They'll be able to offer tenant deposit advice and help you stay compliant.
Handling Security Deposits
Something else to consider is how you'll store a security deposit after a tenant gives it to you. There aren't set rules regarding this in some states, but in Ohio, landlords are legally required to store deposits in interest-bearing accounts.
Keeping deposits separate from other cash is generally a good practice anyway, but as a landlord in Ohio, you need to make sure you adhere to this law. It applies to any deposit that is greater than $50 or one month's rent.
The account must bear interest at a rate of 5% per year for any lease over six months. You must pay this interest out to the tenant annually and at the end of the lease agreement.
After the tenant moves out, you must return the deposit to them within 30 days. Note that the tenant is responsible for providing a forwarding address, and you won't be held liable for not returning it if they fail to do this.
Effective Rental Property Management
Handling security deposits is just one aspect of rental property management. If you want to be successful, you need to stay on top of everything, so working with a property manager may be the best approach.
Stewardship Property Management is a leading property management company in Massillon, OH. Our guarantees based on management fees, leasing fees, legal compliance, and more help ensure your success. Check out our services page for more information.
