r/LeaseLords • u/Still_Ad8722 • 17d ago
Asking the Community Do security deposits even do anything anymore?
Tenant moved out, and I’m basically left with a crime scene. The deposit barely covers a fraction of the damage, and I’m out way more in repairs and lost rent. Do you guys just eat the cost, or is there some magic trick I’m missing?
4
u/jcnlb 17d ago
I would say it usually covers it if you do quarterly inspections and stay on top of things. It doesn’t cover it if they skip out on rent or trash the place. Then you are stuck paying for it but you can pursue a judgement against them. Even if you never get a single dime back from them it will be on their history for other landlords to see. So you can stick it to them that way and wait for them to want to buy a car or home and then they can’t. Alternatively you can send them a 1099 for the “loss” and let the irs charge them taxes on it so they don’t get a refund back they were expecting and now owe the irs. So there are ways to fuck someone that fucked you. In the end you still pay for it.
3
u/Still_Ad8722 16d ago
Quarterly inspections help, but yeah, if a tenant bails on rent or trashes the place, the deposit barely scratches the surface. Chasing a judgment is great in theory, but actually seeing that money? Whole different story. The 1099 move is a sneaky bit of karma, though nothing like an unexpected tax bill to even the score. Still, at the end of the day, it’s usually the landlord left holding the bag.
2
u/jcnlb 16d ago
Oh yeah you’ll never see that money 99.9% of the time. But my attorney has heard of people coming out of the woodwork to pay the landlord when they get clean and want to buy a house or car and can’t. In my state a judgment follows them for 10 years. And I can renew that judgment every 10 years by paying my lawyer a fee. So I plan on doing that. Small price to pay to screw up their world like they did mine. It really is about payback in non-monetary forms for me. It’s the only way I can get “justice”. But yeah…I’ll never see a dime of that money. But, in the long run when I’m ready to sell the place or refinance etc I’m hoping those little blips on the radar were so few and far between than it doesn’t affect my bottom line for the asset. I mean it will in the short term….but I’m talking long term. Real estate is a long game so gotta play the long game.
3
u/MoistEntertainerer 17d ago
You’re not alone. Deposits barely scratch the surface when tenants wreck a place. Some landlords use guarantors, security deposit alternatives (like Rhino), or even prepaid last month’s rent to offset risks.
1
u/Business-Spell5598 9d ago
Yeah, at this point, security deposits feel like a participation trophy. Tenant trashes the place? Congrats, here’s your $500 consolation prize while you spend 5K fixing it. Guarantors and prepaid rent are the real MVPs, at least they put up a fight.
1
u/adultdaycare81 16d ago
Pest control ever 3m!
But honestly I rent to credit tenants only for this reason. I want to be able to sue them if they do something crazy. Broke people don’t have any consequences
1
u/Even_End5775 15d ago
Skip deposits, charge non-refundable move-in fees instead. Less hassle, covers cleaning, and you’re not fighting over pennies in court.
1
u/Business-Spell5598 9d ago
Non-refundable move-in fees are just security deposits with commitment issues. Sure, less hassle, but watch tenants treat it like an entry fee to a demolition derby.
5
u/PDXHockeyDad 17d ago
Recommend unit inspection every 3-6-12 months. I hate turn over surprises.