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9 ways to improve security deposit transparency and property reviews
Many residents often voice frustration about their refund amounts by leaving a negative security deposit review online. But getting rid of security deposits isn’t the answer—security deposits are still an effective way to protect your property and help residents hang onto their money. Here are nine simple ways to improve security deposit transparency, enhance the resident experience, and earn better security deposit reviews.
1. Use an app to improve security deposit transparency
According to one Roost survey, 25% of respondents reported submitting a negative property review due to a lack of transparency and communication.
You can avoid this by providing residents with better visibility into where their security deposit money is stored. You can also keep them updated about any changes–a final deposit installment paid, interest earned (if applicable), a damage charge, and refund status. (Roost’s platform, for example, provides residents with an app where they can view and track their security deposit at any time.) Improving security deposit transparency will help improve security deposit reviews. A security deposit app can also help reduce the lift on your team because residents can get the information they need in the app instead of contacting you with questions.
2. Enable roommates to split and pay their deposits
It’s a Venmo world out there—today’s renters are accustomed to using modern payment methods to send money, split expenses, and pay just their share. There are plenty of tools and apps out there that help your residents do this efficiently in other parts of their life, so it makes sense to give roommates the option to do the same with their security deposit. Deposit automation platforms often provide roommate splits as part of their core offering, which makes the experience of splitting costs for security deposits better and easier for everyone.
3. Offer security deposit payment flexibility
Due to the rising popularity and prevalence of Buy Now Pay Later (BNPL) services, the emerging renter base expects payment flexibility. With a deposit automation platform, your property can provide residents with the option to pay their deposit in installments without requiring extra lift from onsite teams. Helping residents spread out payments can also help improve move-in affordability for low- and middle-income residents.
4. Pay interest to build goodwill
Today’s interest rates mean a resident will likely earn minimal interest on their security deposit money (if offered). But paying your residents interest on their deposits is more about perception than the actual amount.
For many renters, the security deposit represents a large amount of their net worth, and having that money locked up, inaccessible, and not working on their behalf can be perceived as unfair. Even worse? If they believe the property is using that money to their benefit.
The good news is that you can flip this around into a positive and offer interest as a resident financial amenity. Roost’s most recent services survey found that more than 60% of residents said earning interest on their security deposit would make them much more likely to renew their lease.
5. Provide tips and reminders
Another way you can improve security deposit reviews is to provide helpful info and reminders at relevant moments. This means that what you share and when you share are equally important. For example, providing a checklist of the most common damage charges and how to avoid them throughout the lease is most useful at move-in. Once they give notice, sharing hints and tips about deep cleaning your apartment like a professional cleaner will make them feel like you’ve got their back and want them to get a full refund.
By helping residents get more of their security deposit back, you’ll improve your security deposit reviews, too.
6. Security deposit transparency should include itemized expenses and provide descriptions
Many residents report being surprised by the damage deductions taken from their refund. Roost’s security deposit survey reported that only 29% of renters received an itemized list of damages and costs, and 51% reported deposit refund terms were not well communicated. To help make returning a security deposit better for everyone, look for a deposit automation platform that connects to your property management system and automatically surfaces charges and descriptions in a renter app.
7. Streamline your process to enable fast refunds
One of the biggest complaints about security deposits? How long it takes to get a refund. While you may be unable to complete your inspection any sooner or gather bids and invoices for repairs faster, you can expedite the actual payment process by sending refunds primarily through ACH. This not only ensures payment arrives more quickly but that it never gets sent to an incorrect address. If your team is not set up to manage this quickly or efficiently, you can outsource the payment processing to a deposit automation provider.
8. Enable split refunds
Many roommates go their separate ways when their lease ends, and sending one check to one address can be a hassle and a source of contention. You can make the experience of moving out and security deposits better simply by giving residents the option of split refunds. Roost’s platform, for example, enables roommate splits for deposit payments and refunds without releasing the leaseholders from responsibility for any and all unit damage.
9. Include a refund tracker
From pizza delivery to the arrival of your Uber, your residents can track the status of nearly everything. But when it comes to security deposit refunds, many residents feel in the dark about if, where, and when their refund will arrive. Uncertainty about the status of their refund can result in more confusion, complaints, and phone calls.
By providing residents with a tool to track the status of their refunds and any details about charges, you’ll be providing security deposit transparency in a way that eases their concerns and reduces the lift on your team to respond to complaints and questions.
Improve security deposit reviews and transparency
By offering residents better visibility and flexibility, you can maintain full asset protection and improve security deposit transparency and reviews. Making security deposits better can also become a way to differentiate your property. If you leverage a deposit automation, many of the above benefits are baked into the platform and require little lift for onsite teams.
Roost is a mission-driven tech company focused on improving property NOI and renter financial health. Roost’s free platform helps large multifamily automate the deposit intake and refund process, reduce compliance risk, and minimize disputes. It also helps renters avoid late fees and build credit history by providing renting guidance, financial tips, and savings deals, and a simple way to turn their refundable deposits into an instant emergency fund.