Deposit investments (by James [GA]) Oct 12, 2017 1:41 AM|
Deposit investments (by Gail K [GA]) Oct 12, 2017 5:14 AM
Deposit investments (by WMH [NC]) Oct 12, 2017 5:26 AM
Deposit investments (by S i d [MO]) Oct 12, 2017 5:40 AM
Deposit investments (by RB [MI]) Oct 12, 2017 6:36 AM
Deposit investments (by Still Learning [NH]) Oct 12, 2017 7:13 AM
Deposit investments (by WMH [NC]) Oct 12, 2017 7:40 AM
Deposit investments (by RathdrumGal [ID]) Oct 12, 2017 7:48 AM
Deposit investments (by Kim [TX]) Oct 12, 2017 8:32 AM
Deposit investments (by Barb [MO]) Oct 12, 2017 11:28 AM
Deposit investments (by Dave [NY]) Oct 12, 2017 12:32 PM
Deposit investments (by Chris [CT]) Oct 12, 2017 5:00 PM
Deposit investments (by Julie [KS]) Oct 12, 2017 5:13 PM
Deposit investments (by James [GA]) Oct 13, 2017 2:00 AM
Deposit investments (by NC INVESTOR [NC]) Oct 13, 2017 7:35 PM
Deposit investments (by myob [GA]) Oct 15, 2017 5:20 AM
Deposit investments (by Kyle [IN]) Oct 15, 2017 1:19 PM
Deposit investments (by WMH [NC]) Oct 15, 2017 1:42 PM
Deposit investments (by James [GA]) Posted on: Oct 12, 2017 1:41 AM
For those of you holding onto a substantial amount of deposits, do you use it to make more money (buy another property, market, cds, etc)?
I understand some states require it be held in an account to the benefit of the tenant, but many do not.
I'll play like Roy here, and post up my answer later..
Deposit investments (by Gail K [GA]) Posted on: Oct 12, 2017 5:14 AM
Because we have over 10 rental properties in Georgia our tenants security deposits must be held in an escrow account.
So nope; I can't play with their money.
Deposit investments (by WMH [NC]) Posted on: Oct 12, 2017 5:26 AM
As Gail said, there are strict rules governing the holding of the SDs. --173.22.xx.xx
Deposit investments (by S i d [MO]) Posted on: Oct 12, 2017 5:40 AM
This raises serious some ethical questions, in addition to the legal issue Gail K cites.
If the tenant(s) intended for the LL to use their deposit money for investing, they should be fairly compensated for the risk to their money, which in this case means paying them equivalent points and interest of a hard-money lender.
I know LLs in my town who "eat" their tenant's deposit money. Spend it on whatever, then when the tenant moves out, the land lord makes up excuses why no refund is owed...but ultimately the reason is "I spent your deposit." This gives LL's a bad reputation.
Our reputations are precious. Protect them at all cost. Just let the money sit tight until they move out.
My goal is not to beat you up, James, but at bare minimum you need to inform you tenants, in writing, if you plan on doing anything with their money. I do not think they will be happy to learn this. If you're not comfy asking them...then the answer is: "this is a bad idea." --173.19.xx.xxx
Deposit investments (by RB [MI]) Posted on: Oct 12, 2017 6:36 AM
Deposit investments (by Still Learning [NH]) Posted on: Oct 12, 2017 7:13 AM
In NH you are supposed to state in the lease where the security deposit is being held (many don't do this). If you don't follow security deposit laws the judge must award treble damages. --166.137.xxx.xxx
Deposit investments (by WMH [NC]) Posted on: Oct 12, 2017 7:40 AM
Maybe buying a 6-month or 12-month CD isn't a bad idea, but even that is suspect with the rates on them so low. And penalties if you have to cash out early for some reason. In NC that would not fly. --173.22.xx.xx
Deposit investments (by RathdrumGal [ID]) Posted on: Oct 12, 2017 7:48 AM
My LLC has both a checking and a savings account for extraordinary, unforeseen expenses. Because money is fungible, I cannot state where the actual $$$ are, but I always have more more money in the savings account than our total deposits. I can't spend or invest it, because it is not my money. The money belongs to the tenants. --98.146.xxx.xx
Deposit investments (by Kim [TX]) Posted on: Oct 12, 2017 8:32 AM
If your state does not require a separate account for deposits, what does it matter what one does with the deposits? As long as you can cough up the money when a tenant moves out, do what you want. --23.30.xx.xxx
Deposit investments (by Barb [MO]) Posted on: Oct 12, 2017 11:28 AM
I have 3 places remaining with deposits. I keep them in savings account called "deposit savings account" --66.87.xx.xxx
Deposit investments (by Dave [NY]) Posted on: Oct 12, 2017 12:32 PM
In NY we are only allowed to keep 1% I believe as a fee so anywhere you put it won't matter up to the 1%. Good idea though to find places that get 1% as my bank is not even near that...
with 18K that's at least 180 bucks more a year. Thanks!
Deposit investments (by Chris [CT]) Posted on: Oct 12, 2017 5:00 PM
In CT its illegal, I have my security deposits in a separate account for that purpose.
Deposit investments (by Julie [KS]) Posted on: Oct 12, 2017 5:13 PM
In KS there are no laws regulating security deposits.
But it's not my money until it's my money.
When we were managing 250+ units it was not uncommon to hold almost $150K in security deposits. I held them in a money market checking account. At that time (10+ years ago) one could make decent interest on those holdings.
I know a lot of people who dip into their deposit accounts to float their month on a regular basis. Never done it, likely never will. Bad idea, bad business. --104.128.xx.xxx
Deposit investments (by James [GA]) Posted on: Oct 13, 2017 2:00 AM
So one of the states I operate in don't prescribe what happens with deposits in holding. I hold enough money in deposits, it seems like a waste so I was just seeing what others here do.
Sid and others, I'm well aware it isn't my money and I'd be on the hook to replace it. My thoughts were inline with a bank holding others money and then buying investments with that money to fund some operations. Not the bear sterns kind, more like the small credit union kind...
To answer the question, currently I do nothing with them, they sit in an account doing nothing. I'm thinking at least a CD or treasury product.. --88.217.xxx.xxx
Deposit investments (by NC INVESTOR [NC]) Posted on: Oct 13, 2017 7:35 PM
In NC we have two options no interest trust accounts or interest bearing accounts . Any interest earned belongs to the tenant. It can become a contentious issue so our RE Comm. strongly discourages interest on escrow.
As a Realtor I have to reconcile the account monthly in a specific format even if is just sitting dormant.
If I can find a surety bond company that will accept NOO properties I will switch in a heart beat. No chasing former tenants for excess damages and no accounting. --75.181.xxx.xx
Deposit investments (by myob [GA]) Posted on: Oct 15, 2017 5:20 AM
here in GA as Gail said earlier if you have 10 or more deposits the money needs to be in a securty deposit account. What wasn't mentioned that you can't just go to the bank and say I want a security deposit account-- unless your a realtor/broker. Escrow accounts are for them not Joe Blow investor. So we went to the bank and just used the name on the account as our company escrow account. it's all we could do. We also, in GA,have to notify the tenant where and the account number of their depsoit. Not required to pay interest on deposit to tenant. --99.103.xxx.xxx
Deposit investments (by Kyle [IN]) Posted on: Oct 15, 2017 1:19 PM
I hold deposits in an interest bearing savings account. --73.102.xxx.xx
Deposit investments (by WMH [NC]) Posted on: Oct 15, 2017 1:42 PM
My bank (Wells Fargo!) had never heard of a Landlord Trust Account as defined by NC...and NO ONE sells the surety bonds that are coded into NC LL/Tenant Law. --173.22.xx.xx