2022 saw nearly 180,000 eviction cases in Texas' four biggest cities.
As a landlord, evicting a tenant is a worst-case scenario. No one sets out to evict a tenant, but sometimes you're left with little choice in the matter. Your priority must always be to protect your investment property, so if a tenant stands in the way of your ability to do so, you have to get rid of them.
One way to protect yourself against financial losses is to charge your tenant a security deposit. In today's post, we'll explain how security deposits work and what you can and can't do under Texas' landlord-tenant laws.
Keep reading and you'll be able to save yourself from losing money at the hands of a tenant.
What are Security Deposits?
Security deposits are essentially a form of insurance against a delinquent tenant. Have your tenant pay a security deposit at the start of a tenancy and you'll be able to keep that money if your tenant fails to pay rent or damages your property.
When you collect the deposit, you'll usually perform a move-in inspection with the tenant. During this, you'll walk around the unit, making note of any existing damage. It works to protect your tenant from paying for damage they didn't cause while holding them accountable for anything they might do during the tenancy.
At the end of the tenancy, you'll do the same inspection. Along with missed rent payments, repairs for any tenant-caused damage come out of the security deposit.
Security Deposit Laws in Texas
It's important to follow Texas' landlord-tenant laws around security deposits. Unlike other states, there's no limit on how much you can ask for a security deposit.
Remember, however, the more you ask for, the more qualified tenants you'll drive away. Most tenants will ask for the equivalent of a single month's rent as a security deposit. When the tenancy ends, you must legally return the security deposit within 30 days.
Collecting and Returning Security Deposits
If you're making any deductions, you need to provide an itemized list detailing why you made them and provide receipts of repair costs. Should your tenant decide to dispute any of your deductions, you'll need to show this proof in court.
The most common security deposit deduction is missed rent payments. After that, they usually involve minor things, like cleaning costs, broken windows, holes in the walls, or damaged appliances. If the cost of repairs exceeds your damage deposit, you may need to take the tenant to court as well.
How Property Management Can Protect Your Rental Real Estate
Security deposits are an easy way to keep your tenants in line. If they don't want to lose that money, they need to pay rent on time and care for your rental.
Even still, it can be a stressful process dealing with security deposits. You can avoid these responsibilities by hiring a property management company to help.
At 1st Choice Property Management, we're one of Dallas-Fort Worth's top property managers. Contact us today to learn how we can help you avoid tenant issues and maximize your rental income.
