Investing the security deposit.

[Brian Adams]

Hello BPers. This is my first post. I have been looking tirelessly for good forums with some real life lessons on landlording/property management straight from the trenches, and this has been the best site I've found thus far.

My question is: what do property managers do with the security deposits? It seems to me that, like a bank, only a fraction needs to be kept on hand for paying either for repairs, unpaid rents, or returning at the end of the lease. I assume management companies invest some portion of these funds. In what manner, and what proportion? Just an interest bearing savings account, or do managers get a little more creative? I am from Texas where there are no regulations that I know of that requires for the landlord to pay interest, safeguard, or other otherwise account for these funds during the term of the lease.

Thank you very much.