Posted on 02/16/2021 11:14:04 AM PST by Brian Griffin
I think that what the author actually means is that the government requires that the security deposit (if any) be small - not that the government requires small security deposits.
After all, it's not that the government requires security deposits at all.
Regards,
Yet another example of how the gov’t screws up the market. Which is better: deposit controls and no homes available, or no deposit controls with homes available? As more homes come onto the market because of no deposit controls, there will be a downward pressure on rents.
Everyone needs to remember that the gov’t creates nothing. All it can do is redirect resources from one (often, more productive) area to a different (often, less unproductive) area.
Maybe you ought to go all out and force tenants to pay for housing a year in advance like they do in Dubai and the UAE.
Say the rent is $1200/month. And say you want 6 months security deposit.
Anyone that will pony up $7200, for say, 6 months security deposit, plus an additional $2400 for first and last months rent would need their head examined. That’s nearing $10,000 for move in.
Guess you will be sitting with a lot of unused property.
Once you hit 3% of the value of the rental, the renter could just go and buy something with FHA support and pay only minimal interest even if they are high risk.
That is why commercial property (mall and stripmall) is such a mess currently. It is easier to raise the 5% to build new/buy new and spend 5% per year on the note than to make the first years 7% rent and have a 4%-9% rent for 3 to 5 years. The questionable terms that the commercial lenders have in contracts is destroying landlords in markets with 40% vacancy. With 2% overnight rates for years to come there is no point in renting and getting involved with someone who might be owing 7 years of mortgage payments at the end of their mortgage term.
We will see who is willing to book the loss first.
“””The government insists on small security deposits because of a desire to make it easy for tenants to rent a place to live and to move”””
Can you post the websites of those ‘governments’ under statute or regulation impose small security deposits?
I had not heard before that security deposits were regulated.
My rental experience is that owners want too much, deliver little, then cheat renters out of their security deposits. I have no sympathy for landlords.
My rental experience is that owners want too much, deliver little, then cheat renters out of their security deposits. I have no sympathy for landlords.
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Just image my scenario where the renter is out $7200 (6 months security deposit) or so from extremely questionable charges at move out time.
Start with second house rental restrictions and it will soon spread the all housing, the small landlord with just 5 units, for example, then 10, then ???
Only place that would work is military off-base housing where the housing office conducts the pre-move in and post-move out inspections. Seen this in Germany. A landlord loves holding back deposits and he soon becomes blackballed from renting to the military.
Most bigger landlords don’t even take security deposits anymore, because there is a cottage industry of lawyers who make a living filing class action lawsuits against landlords for failing to follow every little jot and tittle of the laws on handling security deposits. Instead they just figure out the average damages they will have to absorb for each resident, and charge that upfront as an “administrative fee” that is non-refundable.
But, as to your point, a lot of areas have some exceptions to the rental laws for smaller landlords, or people renting out units in properties that are occupied by the owner.
I’ve always gotten my full security deposits back from professional landlords, never quickly though.
“Guess you will be sitting with a lot of unused property.”
I believe I read a few years back that around 18 million housing units in the USA are not being lived in.
Note that I wrote:
The freedom of one-unit landlord security deposit setting will be tempered by tenant ability to come up sufficient funds.
“No landlord may demand or receive a security deposit, however denominated, in an amount or value in excess of two months’ periodic rent.”
https://law.lis.virginia.gov/vacode/title55.1/chapter12/section55.1-1226/
Zero is ‘small’.
The term “fair market rent” is used with respect to subsidized housing.
I think the government goal in the situation you mentioned is to ensure the Givemes get to use their government housing vouchers.
This I believe is the case with “affordable” housing unit set asides as well.
“Once you hit 3% of the value of the rental, the renter could just go and buy something with FHA support and pay only minimal interest even if they are high risk.”
In many areas of the country, housing prices have become absurd.
Absurdly high housing prices have a tendency to fall back to realistic.
we were military and housing only did pre and post inspections on BASE housing, not out in town.
It’s a mixed bag isn’t it? I have never gotten the full security deposit back. I was always charged for alleged damage beyond ordinary wear and tear. Well, as a homeowner for decades, I haven’t had to deal with that issue since the last century.
Pro tip for renters:
Buy a set of drip pans for the stove top $11 (Walmart) - $13 (Amazon) and drop them in rather than trying to clean the ones that were there. A lot cheaper than what the landlord will charge you. (Putting in your own when you get there is riskier, since they probably won’t be pristine at the time, and they’ll still try to gouge you even if you never used them during your stay.)
Thanks
In my many years of being a landlord in CA and TX, the amount of a refundable security deposit I would charge would be based upon the amount I felt I could charge and still be able to rent the apt or house. The deposit was usually one months rent and in certain cases I asked for two months rent.
I have been out of the residential renting business for over 25 years. Things have changed-—and not for the better with more govt intrusion.
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