How Much is a Security Deposit for Renting an Apartment?

Renting an apartment means taking care of several tasks and conducting research on many factors. Before signing on dotted lines, take the time to carefully review an apartment lease and make sure there is nothing wrong with it.

Of all the clauses listed in a lease contract, the tenant’s security deposit and the monthly rent are among the most interesting clauses. The landlord or property manager can also request the first and last month’s rent up front, but you can usually get the security deposit back after you pass the move-out inspection. When the tenant moves into a new apartment, this money can then be used as a down payment or as a new security deposit.

Before we continue, let’s see what security deposits actually entail:

What are security deposits?

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Security deposits are the fixed amount a tenant pays in advance before moving in. It is generally understood that the security deposit replaces any damage a tenant may inflict on the apartment. Other than normal wear and tear, the rental unit must be returned to the property manager in the same condition as the move-in point. In these cases, the tenant will get the money back from the deposit whenever he chooses not to renew his rental contract.

Why we cannot recover all or part of our security deposit

The general rule is that if the rental unit is not in reasonable condition (minus normal wear and tear) when a tenant moves out, they must get their security deposit back. Below is a detailed list of several situations where tenants may not get back some or all of their security deposits:

● If there is still unpaid rent from the tenant – whether it is a few months rent or a lesser amount

● If the rental property has suffered significant or even minor damage outside of normal wear and tear during the tenant’s stay

A few other reasons

● There are unpaid utilities that the tenant was responsible for instead of the property management company

● The tenant violates the rules of the rental contract

● The tenant has not paid the first month’s rent, the last month’s rent or other charges in a timely manner

● Any other legal issues, such as leakage of sensitive or confidential information

● Any damage caused by guests, pets (service animals or not) or anyone other than the renter

To be on the safe side, make sure you know how to get that security deposit back. If necessary, seek legal or financial advice so that your security deposit is not compromised.

How much is a deposit to rent an apartment?

If you plan to move into an apartment soon, it is wise to calculate your expected costs. You can start by researching what to expect in the cost of moving into an apartment. For the security deposit, however, you may need to inquire specifically and ensure unique conditions.

The usual amount of security deposits

The average security deposit in most areas is around one month’s rent. Some state laws may allow property management companies or anyone who owns real estate to set a higher security deposit. Instead of a month’s rent, the security deposit can be equal to a few months’ rent. Find out everything you need to know about Michigan security deposit law here.

You can ask, “Can the security deposit be less than one month’s rent?” The answer is, “it depends.”

There are some low-income tax credit properties that offer lower security deposits if you have a good credit history. If we are talking about a market rate complex, the security deposit could be reduced to entice more tenants to move in.

When to expect the security deposit to be refunded

If there are no major damages or upkeep in the apartment, the previous tenant must get their security deposit back within approximately 30 days. The same applies to any partial refund due to the tenant. You may want to keep a separate bank account just for refunds to keep things tidy.

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The exact time of return of the security deposit will depend on various factors. To ensure that your previous owner can easily send you the security deposit amount, leave them your forwarding address. Also check local and state laws to find out what to expect and everything you need to know about security deposit law. If necessary, tenants should know if they should sue someone in Small Claims Court.

Make sure you get your security deposit back

Here are a few ways to make sure you get that deposit back when it’s time to move on:

  • Take photos of the apartment on move-in day and initial viewing
  • If there is damage, take steps to repair it immediately
  • Stay ahead of maintenance issues with regular upgrades and tune-ups
  • Opt for professional cleaning services once in a while, showing receipts when you move out (especially if it was required in the lease)
  • Follow the required moving process and provide notice of intent to vacate in a timely manner
  • Replace broken blinds and fix other minor issues (see: apartment maintenance tips every renter should know)
  • Document everything you do to prove your efforts in the apartment

Factors to consider when calculating your security deposit

Before deciding to pay rent on an apartment, think about how the property manager or landlord will calculate security deposits in your area. These factors include the following:

  • Local laws and state laws
  • Rental unit amenities – these may include in-unit washer/dryer, furnishings, doormen, renovations, trash removal services, elevators, etc.
  • Whether the apartment is furnished or not – find out which furniture you need for an apartment here
  • If the renter has a pet (there may be a separate pet account at most apartment complexes, with their own pet policy and fees)
  • The monthly rental rates at the time
  • The average security deposit of similar properties in the same area
  • The tenant’s credit history (if poor, they may have to pay a higher security deposit) – find out here what credit score you need to rent an apartment

When do you have to pay the deposit?

As per usual expectations, you must pay the security deposit in full before signing the rental agreement. This transaction is preferable (for the owner or the trustee) before the tenant receives the keys to the apartment.

Commonly accepted methods of security deposit payment include cash, certified funds, money orders, cashier’s checks, etc. Before signing, read the contract carefully and make sure that you are willing and able to pay all the fees mentioned. You may need to approach a financial institution for this purpose, so start aligning your finances before committing to such large payments.

What if you don’t get the security deposit back?

If you have given the owner a relevant forwarding address and any other necessary details, you should receive a refund of the security deposit within some time. If the deposit does not reach you within the agreed time or does not return the security deposit to you at all, there is usually a breakdown of the charges that have been deducted. If not, call your previous landlord and ask for an explanation.

There could be a reason for the delay, so give it some time if possible. You may need to follow up with a written letter or email. Be sure to keep this email and make copies of the letter so you have documents on file as well.

Make sure of the amount in writing

Speaking of documentation, the tenant and landlord should also make sure that the amount of the security deposit is written down in black and white. The dollar amount should ideally be included in the lease agreement itself.

If this is not the case, or if the terms of the security deposit are vague, one of the parties may suffer financial loss. The tenant can omit the security deposit altogether or the landlord can keep it for no reason. They could also claim a higher or lower amount, which could still lead to disputes. With proper documentation, it will be possible to prove what everyone agreed on.

Security deposits are generally not considered last month’s rent or any other type of fee. A tenant cannot legally ask the landlord to use the security deposit to cover any rent payment – whether full or prorated.

Takeaway meals

With the housing market as it is now, many people are asking Should I sell my house and rent an apartment?” Before answering this question, they must consider many factors. One of the most important is the security deposit and the conditions relating to it. If you manage to keep this deposit, it can be very useful when you want to invest in a house again.

In the end, everyone’s situation is different. A high security deposit may not be a problem for some people, but it can mean a major difference for people with children, pets, or certain habits like smoking, partying, etc. Be sure to read our first time apartment renter guide before continuing. with your search!


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