Renting out real estate can be a great business model that allows you to turn existing properties or capital into a steady stream of income. Provided that you find good tenants, you can maintain the property and enjoy ongoing rent payment without a full-time work commitment in most cases.
Unfortunately, there are people out there who give renters a bad name through their irresponsible, destructive or even illegal behavior. They might trash your property or disappear one day in the middle of their lease, leaving a substantial amount of rent unpaid.
As a landlord, you have the right to require a security deposit to protect you from financial losses when you rent a property to someone else. What limits does Ohio put on security deposits for residential landlords?
Most landlords only ask for one month’s rent
Under the existing law in Ohio, landlords who charge high security deposits have to hold those funds in an interest-bearing escrow account and pay that interest to their tenants annually if the tenant stays for six months or longer. The current statute establishes a cut off of either $50 or one month’s rent, whichever is greater.
If you charge more than one month’s worth of rent because of the value of the property or other amenities, like furniture, you will have to ensure that you comply with the law regarding the interest for your tenant’s deposit. Especially if you are new to the residential landlord profession, getting advice now could save you from making mistakes that could affect your business and your solvency in the future.