Do you collect additional security deposit at renewal

[Account Closed]

So this is just a throw it out to the world conversation.  

Say you have an annual tenant and they were renting for 700 a month, and your security deposit is also equal to 1 months rent.  When you renew that person for the next year and say you increase the rent to 725, do you also collect an additional 25 in security deposit?

I bring this up because I just made an offer on a property and one of the tenants has been around for a while and their security deposit is 400 dollars and the rent is 800.  It isn’t just one that was like five of the tenants.  

Also if you collect last months rent if you collect it and raise the rent after a year do you collect the difference so they always have the last months rent available?


If you do is there any pushback from the tenants?

[Nathan Gesner]

Originally posted by @Account Closed:

So this is just a throw it out to the world conversation.  

Say you have an annual tenant and they were renting for 700 a month, and your security deposit is also equal to 1 months rent.  When you renew that person for the next year and say you increase the rent to 725, do you also collect an additional 25 in security deposit?

I bring this up because I just made an offer on a property and one of the tenants has been around for a while and their security deposit is 400 dollars and the rent is 800.  It isn’t just one that was like five of the tenants.  

Also if you collect last months rent if you collect it and raise the rent after a year do you collect the difference so they always have the last months rent available?

If you do is there any pushback from the tenants?

As a professional property manager, I would not increase the deposit or last month's rent for a $25 increase. However, you mention the tenant has increased from $400 to $800. In that case, the correct thing to do is require an increase to the deposit and to last month's rent because that is a significant amount.

Personally, I would not renew without the increase. If the tenant is a good one that I want to keep, I would probably offer a payment plan that allows them to increase it over a period of time. However, I do not like payment plans longer than 3-4 months.