Handling Security Deposits for a House Hack

[Cameron C.]

Hey BP, So I just reached an agreement on my 4BR 2.5 bath house in the Southside of Pittsburgh. I've been renting the property for the past 2.5 years and will essentially be turning my roommates into tenants after we close. There has been very minimal wear and tear on the property and I am very good friends with each of my roommates. This is where is obviously get difficult mixing business and friendship but I'm seeking general advice how to handle security deposit (returns) conversations over the next few weeks. Their lease will still be ongoing at the time of closing so it's not something I need an answer to immediately. I want some advice for doing this the fairest way possible. I'm not sure it's fair on my behalf to return the entire thing for tenants that have lived there for 3 years and have caused some minor wear and tear? I had someone suggest to me to potentially make immediate improvements to the living quality (new appliances, furnishings etc) and use their security deposit for that and therefore they would get immediate benefit of their escrowed funds. What're your thoughts? Has anyone had experience with this before? Keep in mind this is not a duplex but rather a SF property.