Ensuring a solid lease agreement and security deposit will help mitigate this.

Additionally, there’s always a risk that any pet-related damages could be hidden under furniture or otherwise concealed, potentially leaving us to cover the costs if the security deposit is fully depleted by other expenses (e.g., damages or unpaid rent).

IE securing them paying tax's insurance etc etc. 

However the event of default just gives the holder or beneficiary of the security interest the RIGHT to accelerate all payments and call the note due..

Simultaneously, you're managing applicants and tenants, who are often working within tight timelines to secure or renew leases.

This provides you with a safety net for any unexpected expenses during the rehab process while also potentially allowing you to secure higher leverage on the purchase price.

We have been fortunate to rarely hold any security funds from former tenants.

Consider all the things that could go wrong and see if the lease addresses them: unauthorized pets or tenants, early termination, security deposit, lease violations, late rent, eviction, lawn maintenance, parking, etc.5.

I am subletting a property that I am planning on purchasing the set up where instead of any type of security deposit I am re-having the property which is necessary before I rent it out.I will have about $20,000 in expenses all before I purchased the property.

One of them being you can't charge more than one month security deposit.