DID YOU KNOW? Rent Manager Calculates Security Deposit Interest!

If your state requires you to pay interest on renters’ security deposits, or if you keep security deposits in an interest-bearing account, there’s a

way to calculate, pay the renter, and receive interest from the bank within Rent Manager®.

You can set up default interest rates by going to File > Administration > System Preferences > Security Deposit > Interest Options.

Choose Simple if interest should be calculated only on security deposits. Or select Annually Compound if interest should be calculated to include both accumulated interest and security deposit.

The Disbursement Method can be specified so that it’s either applied as additional held security deposit for the customer or is added as a credit and applied to a charge (a specific charge type or any charge type). If Any is selected under the credit disbursement option, the interest accrued will be applied to any outstanding charge.

Enter one or more years and the specific interest rate for each. Any year that’s not entered gets the prior year’s rate. So if you entered 1.5% for 2011 and 2% for 2013, interest for 2012 would be calculated at the 2011 rate.

Select the Charge Type used to post interest to customer accounts. The posted charge will appear as a credit (negative charge) either paying additional security deposit or paying another charge, as described above. If security deposits are held in a bank which does not bear interest’but you pay interest to your renters on their deposit’you might consider linking the Charge Type to an expense account. However, if your bank does pay you interest, consider linking it to the same liability account used when adding the interest transaction to the bank account.

For security deposit interest to be calculated for each customer, it must first be enabled at the property level. Go to Property > Miscellaneous > Enable Interest. Rent Manager will calculate and post each customer’s security deposit interest. Go to Activities > Batch Operations > Post Security Deposit Interest.

The default security deposit interest settings can change or be changed for each customer. Alternatively, you can calculate and pay security deposit interest to a customer at move-out. Go to the customer’s account, click Refund/Apply, and add the interest to the security deposit refund or apply it to outstanding charges.

Photo credit: s2photo / Foter / CC BY-NC-ND