The mystery behind the security refundable deposit

Many a time, we have come across property owners grumbling and getting too worried about the security refundable deposit.

The standard norm of collecting 01 month's rent as a security refundable deposit.

The above option is best used when the owner is able to collect a large amount of the rent in advance or upfront. Although it is best advised to screen the client, it is also equally very important to maintain an amazing relationship with the potential tenant as that would minimize a great deal of risk.

The word 'Standard' is mentioned because that has been the standard in the country when it comes to the rentals of homes and apartments and sometimes commercial buildings.

When should you ask for a 03 month's security refundable deposit?

This option is mainly resorted to if the rent is being paid on a monthly basis or the if the number installment payments is higher side. This too is very tricky when it comes to apartments and expats as many expats who are here on a salary tend to limit the security refundable deposit to one month and then pay on a monthly basis from there on. In such instances, it is of utmost importance that the property owner screens the client and if possible, obtains a letter from the potential tenant's employer or gets to touch base with someone known to both parties.

Is it fair to ask for a security refundable deposit of more than 03 months?

It is unfair if you are renting an apartment or house and getting the upfront money as well. Generally, the deposit is high on business premises and not residential properties. Sticking to 01 month is best if you a getting a decent amount upfront or else sticking to 3 month's is okay if the rent is paid on a monthly basis but it's not advised to increase the security refundable deposit just like that. The situation has to be considered and it's always good to be flexible on that.

Is it good to stick to a flat rate?

Some owners like to stick to flat rate as they have this insecurity ingrained in them that the tenant may damage a great deal and there will not be enough to compensate for the negligent wear and tear in the devised premises. In this instance, it might be best advised to stick to a flat rate which could less or more than a month or two of the rent quoted.

Other important aspects to bear in mind when determining the security refundable deposit.

The quality and brand of the furniture in the property plays a major role when determining the amount of the security refundable deposit.

Proper screening of the client, this is the main bit. If this is done properly, you would know how much is a safe figure for you to give out the apartment.

Standard market practice is also advised to be studied and researched so you know you are not making a fool out of yourself.

Seek the advice of a property consultant or property agency and get their input on the matter.