How many of you are charging application fees?

71 Replies

Just looking to find out who's charging fees for rental apps, and what you're charging? Have you had any push back from a tenant who was denied?

Hi there,

I don't personally charge an application fee, but use a service for background/credit check that does. Want to make applying for one of our rentals as easy as possible.

Nada

Originally posted by @Craig Garrow :

Just looking to find out who's charging fees for rental apps, and what you're charging? Have you had any push back from a tenant who was denied?

 cozy.co is a great site to use for this.  Yes, charge.  Make it clear that it's a non-refundable fee.

I have gone on record saying that I don't charge application fees, and it's for a few reasons:

a) I don't want to deal with cash or money orders at the showings.  I'm not interested in people knowing I carry cash with me, because I don't.

b) I find that I can get more applicants by not charging an application fee.

c) I can rule people out pretty quickly with the open records we have in my state, whether it's on the criminal side or the eviction side, as well as financial judgements.

I've heard of cozy. Is that a site where I can input all of the data myself? I'm in a super rural area and most of my tenants either aren't savvy enough or don't have the capability to do it themselves.

Dawn Anastasi I haven't been charging, but I've had about 5 potential applicants in the last year apply, have me screen them and get right up to lease signing, then bail. At least if I charge a nominal fee, I can cover my time somewhat.

Originally posted by @Craig Garrow :

I've heard of cozy. Is that a site where I can input all of the data myself? I'm in a super rural area and most of my tenants either aren't savvy enough or don't have the capability to do it themselves.

Got it.  It works best if they enter it on their own.  However, it may be possible for you to do it as long as you have all of their information, just more work on your part.  Otherwise, just charge and use a paper application and then check your local court docs to determine their credibility.  Good luck.

Originally posted by @Craig Garrow :

Dawn Anastasi I haven't been charging, but I've had about 5 potential applicants in the last year apply, have me screen them and get right up to lease signing, then bail. At least if I charge a nominal fee, I can cover my time somewhat.

Don't wait until you get to lease signing.  Collect a holding fee once you approve them.  Even if you collect $100 or $200 if they bail you keep the money because it's a non-refundable fee, not a deposit.  And they would be less likely to bail on $100 or $200 than $20 or $30.

@Craig Garrow I charge $25/application per adult. This mostly covers my background check. I haven't had any issues and this way I know they are interested. I use www.tenantbackgroundsearch.com and have had great success. In Maryland, landlord/tenant laws allow charges up to $25 for application fees.

We also charge a $25.00 per adult fee {which is a real bargain these days when you consider where the Loonie is sitting ;-)} which covers half of our screening costs.  

Furthermore, if the candidates are successful and we arrive at a lease, we credit the application fee towards their security deposit.   If we do not process the application, we return the fees.

I started charging application fees four years ago. Charging a fee will automatically screen out some potential "problem" applications. I manage 210 rentals and you'll be amazed how many times people want to rent an apartment or house but can't even afford the application fee. I also disclose up front what my screening process includes. I am telling the truth when I say my applications were cut in half within a few months but so were my problems!

I charge $20 per adult and the background check costs me $16. My fee is 100% non-refundable. If granny dies 15 minutes after they submitted the application and they have to go back to Kansas, I still keep the fee. Be sure to disclose this up front.

I charge a $40 fee... I used the Bigger pockets recommended Background/credit check... I didn't like it though because it then had tenant fill in information to send to me... so the whole application was like... why did I get all this info.  Anyways... they were happy to pay and only took one solid application for my first rental.

Unfortunately everyone is not honest. You must weed out the evictions and the criminals. And many folks just walk away. Should the landlord pay fees for applicants that change their mind, no! 

If someone is untruthful they may not fill out the application if they are assured it will expose them. 

This is the correct process. On bad tenant can spoil everything. 

I have used mysmartmove for background checks. The tenant pays them directly. I believe it is $35 per person. I do not collect any money directly.

I charge $35 for a married couple with both of them being background checked.  I eat most the cost of one background check.   If I get a non married couple or college kids for a Joint Tenant then I charge them each $35.

The application fee - - NAH.  Some object to the personal info on the form and over the years had only a few who would not submit that data.  One even told ME I should take her application because I'm the own/manager -- nearly fell off my chair.

Had another that hounded me for 4 months to take his app which did not include source of income, stating it's a new business -- sorry (he's had 3 jobs in 4 months :ouch: )

I've used rhol.com since '97 to access Experian or Trans Union *if* and *only if* the application passes preliminary guidelines, which reduces my expenses.

I charge $35 per. I charge this to weed out the people that might complain about $35. If they complain about $35, then there is a great chance you will get your rent checks late as well. In the past several years, I have never had an issue with renters paying $35 for an application process. This applies to DFW where I lease my properties. 

I charge $35 per person to do a credit and background check on each person who will be living there. I feel it weeds out the non serious renters who are just "kicking the tires" and who aren't serious.

Hmmm....I almost feel guilty:) I charge $75 per adult. Ignoring the difference in pricing and commenting on the reason for the fee: weeding out the people that are not serious and those that won't pass the check. I have not had to turn down one potential tenant yet. I do accept multiple fees from different applicants, but once one is run that is approved I return the additional deposits from other prospects.

I've developed a system that works very well for me. 

1. I only show the units at open houses. I live in Denver, a very hot rental market, so this very easy for me, but may not be possible in other places. Right after work on a weekday. If I put up a post on CL, I get anywhere between 50-100 responses within 24 hours. Usually about a third to half show up.  

2. I tell people at the open house that in order to secure a spot in line, they have to give me a deposit of $30/applicant. 

3. HOWEVER, I do tell the applicants to give me a check or send me the money via PayPal, so I can return their money if I don't accept their application (prior to running credit). 

4. I then go in order of first-come-first serve. I will call professional and landlord references first. If those DO NOT pan out, then I refund the applicants money, as those references cost no money, and it took only a few minutes of my time. 

5. If the initial references do check out, then I run their credit/criminal background check, which costs me $30/applicant. At that point I cash the check or accept the PayPal payment. If they pass, great! $30 for a new apartment is negligible. If they don't, then they lied, because they told me their credit scores met my standards when they didn't. 

The point of all this is that I get a ton of applicants (plenty of backups), can cover my own costs, but am never profiting from just collecting application fees. In a hot market like Denver I've hard from applicants they've lost hundreds of dollars just applying for apartments and never hearing back from the PM after they cash their check. That's just not right. To me I think the ideal is to get plenty of applicants, cover your own cost of tenant acquisition, but be fair to applicants and not take their money if they're not being seriously considered.