When it comes to renting a property, landlords are often concerned about the safety of their investments. One way to mitigate potential losses and damages and protect investment is by increasing the security deposit required from tenants to
What is a Security Deposit?
A security deposit is money paid by the tenant at the start of a lease, which is held by the landlord to cover any damages or unpaid rent that may occur during the tenancy. It is separate from rent and last month’s rent cannot be used as the security deposit. The landlord is entitled to have the security of the security deposit to pay for damages.
A common question we receive at Caron B Realty is, “Can I increase the security deposit after I’ve raised the rent?”
Yes, in Hawaii you legally can increase the security deposit, and from a property management point of view, you should increase it. The original security deposit for the rental property is not set and can be changed. If your rental property is in a different state, be sure to review local laws.
Why you should increase the security deposit:
- Usually, you won’t have to use the security deposit because you have you will have conducted proper background checks on potential tenants before filling the vacancy and you won’t have problem or high-risk tenants. However, things happen and sometimes you have to use the security deposit.
- You want to ensure that you have as much as is allowed to cover the costs of repairs or repainting. Do be aware that the full security deposit may not cover all necessary repairs to damages caused by tenants.
- You may be increasing the rent due to local market conditions or recent property upgrades; the security deposit should reflect that.
The landlord or property manager should be sure to provide notice to your tenants of the security deposit increase and amend the lease agreement. To learn more about our concierge rental management services and discuss any needs for your Hawaii rental property or any needs for Hawaii real estate, call our office to schedule a private consultation at (808) 593-9826 or email concierge@caronb.com
