Small property owners leasing: Application fees, credit checks and background checks?

Question

Small landlord here, who leases out a few apartments and doesn't have big income, and therefore can't hire out and have to do pretty much everything myself. Including repairs, renovations, hvac and plumbing, mowing, and of course screening and interviewing tenants, backchecking- which can take a ton of time.

I've been doing this a number of years now but to date I have never charged any application fees. But of course I also have to do all the backchecking myself.

This can be a lot of work because in my position being stuck with just one squatter could be lethal. So its super important I find good dependable renters.

I'm wondering about these services like TurboTenant, RentSpree, Transunion SmartMove, AppFolio and on. Most of these focus on credit scores, which to date I'm not really sure whether is an overrated indication of how good a renter a tenant will turn out to be, or not. But they also do background checking, criminal records, and on.... things I have to do myself manually. The applicants pay a fee, anywhere between $20 and $55, sign on one of these sites and fill out the information requested. And then you get the report, and go from there.

My questions:

- Has anyone leasing used services like this, and did you find them helpful and worth it? Am I a fool for never doing this, or are these services overrated.

- Do you charge application fees?

- In your opinion does screening tenants through these services help to bring in good renters, or do you find many just don't sign on and follow through?

Thoughts and experiences??

Kyle Hendricks · Answer

I personally would never rent to someone without a credit, background, rental check. It takes 5 minutes. You make an account the tenant is charged directly through the link and the report get's sent to you. If a tenant has problems paying a $40 dollar application fee then you probably do not want them renting your place anyway.

I had to do this myself back for any property I ever rented. Most people expect it. Plus if you a bigger pockets pro member you get RentRedi for free. They are great for background /rental / credit checks.

I also manage my own units. Let me know if you have any questions!

Parris Taylor · Answer

@C Rutherford Good question. The fee is more than just covering costs, it works as a filter. Thirty or forty bucks weeds out tire kickers. Services like SmartMove or RentSpree save you a ton of time and put credit, income, and background all in one place. Then you just spend your energy on landlord and employer calls (don't skip), since that’s where the real red flags pop up.

Ryan Kelly · Answer

Right now, you are treating it more like a job than a business. I absolutely recommend using a rental screening tool, not just for credit scores, but criminal history, eviction history, and job verification. In addition, doing it professionally protects you and helps you avoid fair housing violations. We use RentSpree and it's invaluable for getting detailed information and verification.

Zach Proux · Answer

We’ve always used AppFolio (franchise requirement) and I’m grateful for it. We run their reports through a scorecard we built in Excel, which lets us weigh the whole picture—not just credit—and keep the process consistent and fair. No hard credit minimums, because I don’t think that tells the whole story.

My recommendation: definitely use one of these services. The fee filters out tire-kickers and covers the cost of proper screening. Plus, if you leverage AppFolio (or similar), you can convert applicants straight into tenants and manage everything in one system. It goes way beyond screening—and in my opinion, it’s essential if you want to be a competitive (or even just quality) landlord.

Amit Patel · Answer

Hey there,

I understand being a small landlord can be a hustle—DIY fixes and screening are exhausting! Specialy by yourself I’ve been at it in IL suburbs for 30 years, so I get needing solid tenants without breaking the bank. I swear by screening tools not just for credit, but for criminal, eviction, and job checks. They save hours and keep you fair housing-compliant. Here on BiggerPockets, you can find a solid option in tools option, is Rent Prep and the $$ is similar to others, check it out for quick, reliable reports. We use in pur PM On-Site since a wile ago and we always charge a $60 fee to do it; most serious renters pay without fuss, we havnt got any problem with that. These tools help me land reliable tenants 90% of the time. If you need more help send me DM no problem!

Cheers,

Carlos Hennings · Answer

If you’re screening on your own, you’re probably verifying credit, criminal, eviction, and employment data manually, which can take hours if not days per applicant. Most modern screening platforms now combine those searches in one report and let the applicant pay directly, which removes your out-of-pocket cost.

Credit alone doesn’t tell the full story, but when it’s paired with criminal, eviction, and verified income/employment data (pulled directly from payroll or bank connections), it gives you a much clearer risk picture. Some systems even verify identity using facial biometrics to help prevent fraud, something becoming more important as fake IDs and doctored pay stubs rise.

Application fees are common and generally considered fair. Just be sure to check with your local housing authority for any fee caps or restrictions in your area. Nationally, application fees tend to average around $50.

In short:

• You save several hours per applicant.
• Applicants pay the fee directly.
• Reports usually return in 1–2 hours. (Stay away from instant results)
• You get cleaner, verified data (income, ID, rent history).

You save several hours per applicant.

Applicants pay the fee directly.

Reports usually return in 1–2 hours. (Stay away from instant results)

You get cleaner, verified data (income, ID, rent history).

It’s definitely worth exploring. You’ll still make the final judgment, but you’ll spend less time chasing documents and more time focusing on your properties.

Message me any time if you want to chat more.

Michael Smythe · Answer

Just because you're a small landlord, doesn't mean you should think small:)

Technology can be easily leveraged to do what large companies do!

How are you verifying an applicant is behind on their car payments and will prioritize that over paying rent, once they move in?

Also, learned a hard lesson years ago during a showing when an applicant was speaking to their friend and wasn't sure how interested they were in the home. Friend asked if we had an application fee, when I said no, they recommended their friend apply just to keep their options open! They never rented from us:(

So, an application fee is way to a FILTER out prospects that aren't serious and SAVE YOU TIME!

Carl Millsap · Answer

@C Rutherford I've used Rent Redi, and some other companies to help gather information. We have Appfolio now.

1. Do you have qualification standards that you publish /share with potential applicants? i.e. no evictions within the last 12 months etc.

2. What is your time worth? Sure it doesn't take a lot of time but your time has value. We charge an application fee, but we also publish our criteria to prospects so they have a good ideal if they'll qualify before they shell out $60.

An application fee covers our overhead, and it deters some people which is fine.

3. We have a rubric that we use for the background check, LL feedback, rental history and income into that gives us an up or down or if someone is borderline then we employ risk mitigation items like double deposit, or LEAP policy. This also takes the subjectiveness out of the equation.

4. In my experience the background checks, credit report etc. gives us a better picture. When we see someone has a collection account for unpaid rent that means something. We use the credit report to help us determine debt to income ratio. $4k a month of income looks good until the credit report shows $3000 a month in payments going out.

Recommendation: use a service, implement an application fee and see if it yields better results...if not you can always go back to what you're currently doing.

Michele Fischer · Answer

We moved away from our units, so we use a property manager now, but we did it quasi in-house and never charged an application fee. In my mind it is a small cost to the landlord that doesn't add up to very much agains the bottom line and can deter applicants from applying (both the cost and the hassle).

We used the inexpensive screening service that our state landlord association offers and supplemented it with our own calls and checking. I had a point system that I documented to help make things less subjective and more defendable for discrimination claims.

Agree that credit score or an approximation isn't the full picture. It is an one of many indicators and I actually used other data on the report more than the score itself.

Colleen F. · Answer

If you want previous LL reference checks I don't think any of these services by themselves will work. A combined approach of a short app and sending a link to smart move or rentprep or similar can give you a good picture. So you let them pay directly for credit and background. You review the payment history credit score etc that comes from the vendor and you need to do the LL calls.

Small property owners leasing: Application fees, credit checks and background checks?

Small property owners leasing: Application fees, credit checks and background checks?

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