After weeks or months of searching, you've finally found your perfect apartment. You've crunched all the numbers and the rent and utilities match your available budget. And now it's time to sign the lease. But your rental agreement isn't the only thing you'll be signing off on.
Lease signing time can mean a handful of additional charges and fees. At the signing, you could be writing checks to cover a move-in fee, a parking fee, a pet fee, an HOA fee, an amenities fee, first and last month's rent and a security deposit.
What exactly does it mean to pay a security deposit on an apartment, and how can it benefit you? Is it just extra money going to your landlord or a mutually-beneficial agreement?
A security deposit is provided to your landlord at the time of lease signing or move-in. In simplest terms, a security deposit is a promise to your landlord that you will take care of your apartment, and your landlord's collateral in case you don't. It is a deposit from you that guarantees your landlord's security.
Typically, your security deposit is equal to one month's rent. But it can also be more. Some state laws cap security deposit at two or three times rent, while others do not designate.
Most states have laws designating the use of security deposits. Your deposit can usually only be used to pay for repair to wall or structure damage, appliance damage replacement or atypical deep cleaning caused by the actions of the tenant. Generally, only damage above “normal wear and tear" can be paid for with a security deposit.
Security deposits are a benefit and (in most cases) refundable, minus any funds used to repair damages. Over the course of your lease, landlords must hold onto your deposit and cannot use it for any other purpose. Your landlord may also be required to pay interest on the deposit, depending in part on how you long you hold the lease.
As a tenant, it is important to protect yourself by knowing your legal rights for your security deposit. And that starts with knowing the difference between the security deposit and last month's rent.
Your security deposit is not rent. It is your money, that's the benefit. The security deposit you give your landlord is your money held by them to pay for damage repair upon move-out. Your last month's rent is money that covers, yes, your last month's rent should you move out without paying.
Your security deposit (in most states) cannot be used to cover delinquent rent. Last month's rent can only be used for rent. Security deposits can only be used for damage (again, depending on your state or city's laws).
And in some states, landlords are forbidden from collecting both at lease signing. They must choose between a security deposit and last month's rent.
In the end, the security deposit system benefits you and protects you as much as your landlord.
Having turned over a security deposit on your apartment assures you, as a tenant, that you are covered for damages with money that won't affect the money you've already provided to cover your last month of rent.
And conversely, you benefit from knowing that your landlord cannot pay for repairs with or above your pre-paid last month's rent.
The primary benefit of security deposits are that they are (in most cases) refundable. If you take care of your apartment — or make simple repairs and clean the place before move-out — you will receive the entirety of your security deposit after your lease is up.
In a situation where you must vacate your apartment because you can no longer afford your rent, your security deposit can protect you from furthering your financial hardship by having to pay for damages when you depart out of pocket. The money is a benefit, already accounted for and earmarked for such a purpose.
Remember, your landlord cannot use your security deposit for anything but repairs. Before a designated time relinquishing your apartment (again, depending on state and municipal statutes), you will receive a check with the amount of your deposit. Of course, this was your money the entire time.
But after a year or two, you may have completely forgotten about having paid it. Like $20 you find in your pocket, receiving your security deposit back in the mail can essentially be found money.
Lastly, much like your lease itself, your security deposit is a contract, an agreement, between you and your landlord. You attest that you will maintain your apartment properly and with care.
They hold onto your money as a sign of good faith that you will hold up your end of the bargain. That can connect you and your landlord and foster trust, communication and a positive relationship between them — the one providing housing — and you — the one needing said housing.
Now that you understand the benefits of your security deposit on your apartment, you can search for your new place with confidence.
Armed with the knowledge of how a security deposit can benefit you and fit into your overall apartment budget, it's time to start looking. Not every landlord requires a security deposit, but keep it in mind as you search for your next great new place on Apartment Guide.
The post How a Security Deposit on Your Apartment Benefits You appeared first on Apartment Living Tips - Apartment Tips from ApartmentGuide.com.
Lease signing time can mean a handful of additional charges and fees. At the signing, you could be writing checks to cover a move-in fee, a parking fee, a pet fee, an HOA fee, an amenities fee, first and last month's rent and a security deposit.
What exactly does it mean to pay a security deposit on an apartment, and how can it benefit you? Is it just extra money going to your landlord or a mutually-beneficial agreement?
What is a security deposit?
A security deposit is provided to your landlord at the time of lease signing or move-in. In simplest terms, a security deposit is a promise to your landlord that you will take care of your apartment, and your landlord's collateral in case you don't. It is a deposit from you that guarantees your landlord's security.
Typically, your security deposit is equal to one month's rent. But it can also be more. Some state laws cap security deposit at two or three times rent, while others do not designate.
Most states have laws designating the use of security deposits. Your deposit can usually only be used to pay for repair to wall or structure damage, appliance damage replacement or atypical deep cleaning caused by the actions of the tenant. Generally, only damage above “normal wear and tear" can be paid for with a security deposit.
Security deposits are a benefit and (in most cases) refundable, minus any funds used to repair damages. Over the course of your lease, landlords must hold onto your deposit and cannot use it for any other purpose. Your landlord may also be required to pay interest on the deposit, depending in part on how you long you hold the lease.
The difference between a security deposit and last month's rent
As a tenant, it is important to protect yourself by knowing your legal rights for your security deposit. And that starts with knowing the difference between the security deposit and last month's rent.
Your security deposit is not rent. It is your money, that's the benefit. The security deposit you give your landlord is your money held by them to pay for damage repair upon move-out. Your last month's rent is money that covers, yes, your last month's rent should you move out without paying.
Your security deposit (in most states) cannot be used to cover delinquent rent. Last month's rent can only be used for rent. Security deposits can only be used for damage (again, depending on your state or city's laws).
And in some states, landlords are forbidden from collecting both at lease signing. They must choose between a security deposit and last month's rent.
How your security deposit benefits you
In the end, the security deposit system benefits you and protects you as much as your landlord.
It covers damages
Having turned over a security deposit on your apartment assures you, as a tenant, that you are covered for damages with money that won't affect the money you've already provided to cover your last month of rent.
And conversely, you benefit from knowing that your landlord cannot pay for repairs with or above your pre-paid last month's rent.
It's usually refundable
The primary benefit of security deposits are that they are (in most cases) refundable. If you take care of your apartment — or make simple repairs and clean the place before move-out — you will receive the entirety of your security deposit after your lease is up.
It is money you don't have to come up with in an emergency
In a situation where you must vacate your apartment because you can no longer afford your rent, your security deposit can protect you from furthering your financial hardship by having to pay for damages when you depart out of pocket. The money is a benefit, already accounted for and earmarked for such a purpose.
It is money essentially earned after you move out
Remember, your landlord cannot use your security deposit for anything but repairs. Before a designated time relinquishing your apartment (again, depending on state and municipal statutes), you will receive a check with the amount of your deposit. Of course, this was your money the entire time.
But after a year or two, you may have completely forgotten about having paid it. Like $20 you find in your pocket, receiving your security deposit back in the mail can essentially be found money.
It fosters trust between you and your landlord
Lastly, much like your lease itself, your security deposit is a contract, an agreement, between you and your landlord. You attest that you will maintain your apartment properly and with care.
They hold onto your money as a sign of good faith that you will hold up your end of the bargain. That can connect you and your landlord and foster trust, communication and a positive relationship between them — the one providing housing — and you — the one needing said housing.
Finding an apartment budgeted with a security deposit
Now that you understand the benefits of your security deposit on your apartment, you can search for your new place with confidence.
Armed with the knowledge of how a security deposit can benefit you and fit into your overall apartment budget, it's time to start looking. Not every landlord requires a security deposit, but keep it in mind as you search for your next great new place on Apartment Guide.
The post How a Security Deposit on Your Apartment Benefits You appeared first on Apartment Living Tips - Apartment Tips from ApartmentGuide.com.