How to handle security deposits for rent per room?

[Wilbert Gonzalez]

I'm considering renting a property per room in order to maximize the rental income. It's a large single family house, 5 bedrooms, 2 full baths, kitchen on main level and in basement. However, I've never done a rooming house before and wanted to know the best way to handle security deposits and how they may be applied to damages in the future. I live in CT. Thank you in advance for your responses.

[Nathan Gesner]

My deposit policy is a minimum of one month's rent. If the house rents for $1,000 then the deposit is at least $1,000. For higher-risk tenants, I charge $1,500 or $2,000.

I'm guessing this is for college students which means:

1. No credit or financial history

2. No rental history

3. No employment history

4. No maturity

5. No relationships so they will not feel obligated to the other roommates

These are high-risk tenants. No proven track record, living on their own for the first time, immature, bills being paid by mom and dad or borrowed funds, etc. I assume you are using cosigners but you still need a higher deposit to mitigate the risk.

I would consider a double deposit and then split it among the five tenants. If the house would ordinarily rent for $2,000 a month, that comes to $400 per room but you are probably including utilities, TV, internet, etc. So maybe it's $500 per room. I would consider $750 - $1,000 per room as a deposit.

This is all based on assumptions because I don't know your actual plans, your experience level, the quality of students (Harvard Med vs. Community College), and many other factors. But I hope it helps.