Calculating the rent deposit when raising the rent

General Landlording & Rental Properties
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Calculating the rent deposit when raising the rent

Freeman Schultz
East Coast · Member since 2015 · 111 posts · 14 votes

How do you calculate the rent deposit when you have raised the rent. Let's say you do a lease renewal for a tenant and you raise the rent by 10%. Is the tenant required to provide that 10% to the rent deposit?

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Nathan GesnerBusiness Member
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Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
10y

I leave the deposit the same because I wouldn't be renewing their lease if they were bad tenants. I review their records and conduct a detailed inspection of the rental prior to renewal. If they are bad enough that their deposit needs to be bumped up 10% then they are probably bad enough that I don't want to renew with them.

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  • Mike Makkar
    Investor · Plano, TX · Member since 2014 · 188 posts · 149 votes
    10y

    @Freeman Schultz, You don't necessarily need to do it, but it makes it for easier accounting when you sell off the property, which you'll have to transfer back to the buyer. When you raise the rent, you'll need a new lease. Just specify the new deposit as an adjustment from the previous deposit.

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  • Tanya F.
    Rental Property Investor · Madison, WI · Member since 2013 · 629 posts · 339 votes
    10y

    We don't change the deposit amounts. We keep track of the accounting by putting each tenant's deposit in a separate savings account. We return deposits with interest.

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  • Nathan GesnerBusiness Member
    Moderator
    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    10y

    I leave the deposit the same because I wouldn't be renewing their lease if they were bad tenants. I review their records and conduct a detailed inspection of the rental prior to renewal. If they are bad enough that their deposit needs to be bumped up 10% then they are probably bad enough that I don't want to renew with them.

    The DIY Landlord Book4.7248 Reviews
    WebsiteView Page
    4Reply
  • Freeman Schultz
    OP
    East Coast · Member since 2015 · 111 posts · 14 votes
    10y

    Thanks for the response. Just to clarify in this situation would the 10% be the appropriate amount?

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