In many parts of the state and nation tenants deposits are not required to have interest paid on them. In Santa Cruz County, the unincorporated areas, the deposits earn .34% interest for the time held in 2007. This interest rate varies throughout the years, and is interesting to note the changes that mimic the interest rates. In the city of Capitola and Santa Cruz, the guidelines are slightly different, but the rates are the same. Watsonville has interest that is needed to be paid on deposits as well. To see the rates and information regarding these ordinances go to
http://sccounty01.co.santa-cruz.ca.us/DAInternet/interest_sec_dep.asp You will note that the City of Scotts Valley does not have this requirement. Many county’s have different ordinances regarding tenant laws and many do not require interest payments, which are comparable to what would be yielded in a savings account. State law does not require interest payments on residential real estate investments that are rented out to tenants.
For owners of real estate investment property, this is a bookkeeping event that one has to administer. To determine what is owed a tenant, take the rate times the amount for the annual dollar amount. If they tenant has been there less than a full year, either use number of months or use a per diem rate and multiply by the number of days. A simple example is if a tenant had $2000 as a deposit and were there for a year, at the current rate of .34%, they would be due $6.80 for 2007. If you want to look for investment
property in Santa Cruz follow the link and either search for multi-residential or commercial. Commercial deposits receive no interest.