New Hampshire Security Deposit?

Question

Just close on my first property on 12/21, a duplex in Dover, NH. Working on my first listing along with preparing the unit. I plan to do a month to month lease. Should I take a Security Deposit? I read on a New Hampshire government page the law states that the security deposit must be kept in a special escrow account with a bank or a bond posted with the municipality. Does that mean I could place the security deposit in a savings account as long as I don’t use it for my own personal use? And I understand the law states you must give the tenant a receipt of the deposit. Thanks!

Sasha Fukuda · Answer

When i buy a property, i open a checking account for that property and a savings account for each unit. Those savings accounts are where i place the security deposits. In my leases, it states the rent, the amount of the security deposit, and the bank it will be held at. It then states "... receipt of which is hereby acknowledged by landlord". As far as i know, that's all i need, but that's really a lawyer question. I have a credit card for each property and link that credit card to the checking account that goes with it. I link both the credit card and the checking account to my rental property app, Stessa. It's free if you have under a certain number of properties, and it makes it very easy to keep records since every business expense for the property and every rental payment is automatically recorded. That's how i do it.

Carini Rochester · Answer

Open a business checking account for your rental business. Open a savings account at the same time. Deposit the security deposit funds in the savings account. Don't use the savings account for anything else.

Drew Sygit · Answer

you should speak with an attorney

Jaylan Archer · Answer

Hey Patrick!

Congratulations on the purchase of your first duplex. Dover is a fantastic market right now benefiting from the proximity to Portsmouth, new high school and local employers. I have been working with several investors over the last few years that have focused in on Dover for the appreciation as well as the cash flow.

I always receive a security deposit for my rental properties and recommend it to the investors I work with as well. There is a good chance that during the length of you owning this property someone will damage something or leave it in an unsatisfactory condition.

Nathan is spot on in regards to laws limiting the amount of a security deposit - Nh allows for it to be the amount of one month's rent.

Here is another website about NH security deposits.

https://nhlegalaid.org/self-he...

Would be happy to connect with you or recommend a property management company if you decide to go that route.

Nathan Gesner · Answer

Here's an explanation and reference to the actual statute: https://www.doj.nh.gov/consume...

Laws are starting to limit what a Landlord can charge, or they make it expensive to hold. For this reason, many Landlords are converting to a bond or insurance type program.

Here's a great explanation and links to specific programs: https://joinroost.com/renting-...

I've personally used Obligo. I know a lot of property managers that use Assurant, Leaselock, and Rhino. Keep in mind some products are only available if you have a certain number of doors.