Two important topics for anyone renting out a Council Bluffs property: rent collection and security deposits. This is the crux of your relationship with your residents; you’re agreeing to rent them a safe, habitable, and functional property. They are agreeing to pay your rent every month, and to protect you against potential damage or unpaid rent, they’re going to provide a security deposit before they move in.
Security deposit collection and return must follow Iowa laws. Successful and consistent rent collection requires a process.
As an experienced Council Bluffs property management company, we have systems in place to manage how we collect your rent and how we collect and return security deposits.
Here’s what we can tell you.
Council Bluffs Property Management and Rent Collection
On-time rental payments are essential to the success of your investment property. With good tenant screening and excellent tenant relationships, you can expect rent to come in on time every month. You also need a rent collection policy, and that policy needs to be in the lease agreement.
- Establish and enforce rent collection policies
Make sure your tenants understand your expectations when it comes to rent collection. Discuss your rent collection policy before your tenant pays the security deposit and signs the lease. In your lease agreement, include clear instructions about how much rent is due, when it is due, and what the consequences will be if it’s paid late. Include any information about grace periods and late fees.
- Make rental payments easy and convenient
Most tenants today expect to be able to pay rent online. They don’t like the hassle of mailing a check or dropping off payment to you in person. When you make it easy for them to pay rent, they’re more likely to pay on time. Options are important. Some tenants will want to pay with a debit or credit card. Others will want to seamlessly transfer funds from their bank account to yours.
Most Council Bluffs property management companies offer tenants and clients an online portal. This allows tenants to pay rent online, set up recurring rental payments, and identify the cards or accounts that are to be charged. It increases the likelihood that rent will be paid on time and provides the documentation we need for your accounting and bookkeeping.
- Communicate with tenants
Having a good relationship with your tenants will always reduce the chances that rent will come in late.
Remain available, accessible, and open with your residents. They’ll be more willing to tell you if rent is going to be a day or two late one month. It will save you the hassle and stress of chasing down late rent.
Iowa Security Deposit Requirements
When you’re renting out a Council Bluffs rental property, it’s important to collect a security deposit from the tenant before the lease begins. This deposit must be held until the end of the lease period and will protect you against nonpayment of rent, unpaid utility bills, and potential property damage left behind by the tenant.
Iowa has some regulations and requirements when it comes to the collection and return of the tenant’s security deposit. These need to be followed precisely. Our experience in Council Bluffs property management has shown us that if there is going to be a dispute between landlords and tenants, that dispute will likely center around the security deposit.
- Security deposit limits
According to Iowa landlord-tenant laws, you are not allowed to charge more than the equivalent of two month’s rent for the security deposit. This does not mean that you should collect that much. You can collect the equivalent of one month’s rent or you can set your security deposit amount; it simply cannot exceed the total cost of two rental payments. If you’re renting out a home for $1,000 a month, for example, your security deposit cannot be higher than $2,000.
- Returning security deposits to tenants
After a tenant has vacated your property, the law requires you to return the security deposit within 30 days of the move-out. If you are going to withhold some or all of the deposit to pay for repairs and other legally applicable expenses, you must provide the tenants with an itemized list of those costs. You should also provide copies of invoices and receipts.
Avoid security deposit disputes and conflicts. Make sure you’ve done a thorough job documenting the condition of the property before move-in and after move-out. You’ll need to substantiate any claim you make against a tenant’s deposit, otherwise, you can get into some expensive legal trouble.
- Deducting for damage (never for wear and tear)
You can withhold some or all of the security deposit when rent isn’t paid. Most deductions, however, will occur because of tenant damage.
Make sure you know the difference between tenant damage and normal wear and tear. You cannot deduct for wear and tear.
When you’re reviewing the condition of your property after the tenants have left, make notes and take pictures. Normal wear and tear is anything that would happen to the home in the normal course of living there. This might include scuff marks on the walls or floors where furniture was placed. It might also include small nail holes where pictures were hung or worn areas of the carpet in high-traffic hallways and rooms.
Damage is different. It might look like carpet that’s been torn up or damaged by children or animals. It could also be large holes in the walls or doors that were ripped from their hinges. Sometimes the damage is accidental, but it’s still the responsibility of the tenant. You can charge the deposit for things like broken light bulbs, missing blinds, alterations to the home, or missing appliances. Document what you’re charging for, take pictures, and make an itemized list.
If you need help managing rent collection and security deposits, we’re your best resource. Contact us at Kouri Management when you’re looking for Omaha property management. We provide expert leasing, management, and maintenance services in Council Bluffs and Omaha, Nebraska.