Did you know that it is typical to have an application fee for an apartment?
While they vary from state to state and from apartment complex to apartment complex, there will almost always be an application fee. That means as a landlord or property management company, it's important to know what type of fee to charge.
This way, you aren't losing out on money but also aren't overdoing it to lose out on applicants!
Ready to learn more? Here are three things to know about application fees.
1. There Are State Laws Regarding Application Fees
As a property manager, it is important to know that there are state laws regarding application fees.
That means that when it comes time to set an application fee, you need to make sure that you are aware of your own state laws.
As a property management company, you need to make sure you are using your knowledge and best practices for the overall pricing of the application fee. You do not want it to be too high or too low for the area.
While most do not have fee limits, there are several states that do have laws regarding application fees.
2. Always Consider Refunding Fees to Applicants
In hot markets, you may end up getting a lot of applicants at one time. When that happens, you could decide to rent it to one applicant while other applicants have already applied and paid the fee. If that happens, then they paid for no reason at all.
In this case, it may be beneficial to consider refunding the fees to the applicants that applied after you were already in the process of renting it out to the other applicant. If you do not want to go this route, you could make them non-refundable so that you don't ever have to return application fees.
3. Each Applicant Over 18 Should Be Charged a Fee
Every person on the lease over 18 should be charged the application fee. That means if there are two people living there, both need to fill out the application fee. Even if a couple is applying, they both need to apply separately and pay the fee separately.
This is because you will have to run their background and credit checks to ensure they are a good enough fit for your property.
Charging Application Fees as a Property Management Company
As a property management company, you should know what you are doing when it comes to charging application fees. You need to be aware of laws, what your competitors are doing, and what is a reasonable price for the application fee.
If you are a landlord and need help with managing your properties, do not hesitate to reach out to us at Veno Properties. We can help you with applications, tenants, managing your properties, finding rentals, and so much more!