How many of you are charging application fees?

General Landlording & Rental Properties
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How many of you are charging application fees?

Craig Garrow
Real Estate Broker · Malone, NY · Member since 2013 · 345 posts · 70 votes
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?
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Nathan GesnerBusiness Member
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Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
10y

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.

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  • George C.
    Rental Property Investor · My City, NY · Member since 2012 · 51 posts · 32 votes
    10y

    I advertise as a R/E company and not a mom & pop and advertise that we do credit & reference checks. I charge $10 each adult 18 and over at time they hand in completed applications which I give out at open house or private showing. It costs me $15 to run a credit check/eviction report from AOA & then use google, facebook & the free online court records and such for back up. Charging as little as $10 keeps away 95% of the deadbeats, the 5% that think I'm bluffing a credit check get that defeated look when their BS stories don't work and get the thorough application in their hand, they always say that they'll return it soon, only never to be heard from again. I've only had one train wreck actually go through with the application process, I guess he still thought that I was bluffing about the credit check. This guy had multiple fresh evictions & bad debt...but he had a beautiful truck and sure could sling the BS. Turns out the truck was the only thing he actually paid on.

      I figure keep the app fee cheap, that way it wont be a turn off & it's enough to keep the bottom feeders away.

      For each empty I probably only run one set of applications, because the ones that actually apply will 98% of the time be offered the unit.

      I say right in the ads that, "we're not looking for perfect credit, just cant be a horror show, BK, foreclosure, medical bills ok".  So the average decent tenant will still feel they have a chance. I don't want to scare the good (enough) ones away.

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  • Stephen Hundley
    Realtor · Lafayette, LA · Member since 2011 · 297 posts · 175 votes
    10y

    me, but only after I review their application and call previous landlords

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  • Brie SchmidtBusiness Member
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    Real Estate Broker · Chicago, IL · Member since 2013 · 6k+ posts · 5k+ votes
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    I don't take an application fee, but they must pay for the MySmartMove report directly on the website

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  • Joshua H.
    Pittsburgh, PA · Member since 2015 · 37 posts · 29 votes
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    @Dawn Anastasi Charging a holding fee is an excellent option. Do you put that toward their first months rent if they decide to move in? 

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  • Lawrence Siers
    Investor · St. Louis, MO · Member since 2015 · 7 posts · 4 votes
    10y

    I don't charge an application fee and I don't use paper applications. I use an online service (Cozy) where the prospect completes the rental application online for free but they're required to purchases a credit/criminal background check report through Cozy for $35.00 after they compete the application. That charge serves the purposes of weeding out people who are not serious about the unit. But I will let the prospect know what my minimum criteria is beforehand so that they don't waste their time and money.

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  • Michael Morgan
    Investor · Denver, CO · Member since 2015 · 6 posts · 0 votes
    10y

    Denver area. 

    I charge $45 per adult, and use tenantbackgroundcheck.com to run background checks and credit reports. In the past, I used a service that allowed potential tenants to authorize the background check directly in the service's web page, but with not a lot of success. 

    Main reason for charging an application fee is to weed out prospective tenants that are not serious about the property

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  • Account Closed
    Investor · Baltimore, MD · Member since 2014 · 1k+ posts · 688 votes
    10y

    25 fee, if they are serious, they'll pay it.....if they aren't, they won't. 

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  • Penny ClarkPro Member
    Sacramento, CA · Member since 2014 · 513 posts · 319 votes
    10y

    @Craig Garrow,

    We charge a $35 application fee per adult for the following reasons:

    - It helps to screen out those tenants who are not serious about finding a place, especially for lower end properties. 

    - It makes it worth our time to personally review the application.  Although we use a third party company, we still must review the report and follow up on rental history, employment and income verification and a criminal check.

    I agree with @Dawn Anastasi about charging a non-refundable holding fee of $100 or more on higher end rentals. 

    To appease tenants who pay the fee but don't pass the screening criteria, we offer them a free copy of the report. This can be helpful if they are unaware of charged off debts, judgements or a forgotten eviction that is preventing them from securing a place to live.

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  • Dawn AnastasiPro Member
    Rental Property Investor · Milwaukee, WI · Member since 2013 · 6k+ posts · 4k+ votes
    10y
    Originally posted by @Joshua H.:

    @Dawn Anastasi Charging a holding fee is an excellent option. Do you put that toward their first months rent if they decide to move in? 

     No, toward the security deposit.

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  • Rumen Mladenov
    Investor · Newark, DE · Member since 2014 · 245 posts · 198 votes
    10y

    I do not charge an application fee. If two similar properties in the same neighborhood are available and one charges application fee while the other does not, where do you think a strong applicant would apply first?

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  • Sheree H.
    Rental Property Investor · Atlanta, GA · Member since 2013 · 67 posts · 26 votes
    10y

    I charge $50 per applicant, but I meet them in person, tell them upfront exactly what criteria I'm looking for, and ask them if they meet those criteria. If they don't get pass screening, it's always because they lied. My rentals are mostly in low-income areas, and you'd be surprised at the high percentage of applicants that lie. These applicants will apply everywhere, banking on that one landlord who doesn't do the background checks. I have never had anyone ask for a copy of their report - they already knew what was on it. That fee somewhat deters tire kickers, but mostly it pays for my time to deal with these applicants.

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  • Jerry W.Pro Member
    Moderator
    Investor · Thermopolis, WY · Member since 2012 · 4k+ posts · 4k+ votes
    10y

    I do not charge an application fee.  I am not aware of any landlord or management company charging one in my town.  I have an application form that would allow me to do so.  I do call past landlords and places of employment to check job status.  I have had a few withdraw applications when I ask for information on past landlords or jobs.  I am lucky to be in a small town.

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  • Dawn BrenengenBusiness Member
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    Real Estate Broker · Raleigh, NC · Member since 2014 · 2k+ posts · 1k+ votes
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    @John Thedford Darn! I read through almost two pages thinking I had the highest app fee at $50/adult.  You have me beat, although I have considered raising the fee since my screening company also just raised fees a bit.  

    I charge because the company I use to screen tenants charges me. I do my best to not have more than one applicant at a time to not waste people money. I do not want to process a ton of applications. I want ONE really good applicant.  

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  • Sb Carson
    Investor · Philadelphia, PA · Member since 2012 · 11 posts · 4 votes
    10y

    Absolutely charge a fee to cover costs of background and credit checks - fee for each applicant as we run checks on everyone living in unit.  In addition, non refundable deposit of one months rent due with application and application fee.  Deposit refunded only if we, as landlord, do not accept applicant.  

    Would rather have 1 applicant that is serious than more who aren't sure what they want.

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  • Seth Kitchka
    Rental Property Investor · Muskegon, MI · Member since 2014 · 60 posts · 7 votes
    10y

    We don't charge a fee and the initial application is free. When we want to move forward with an applicant they pay for the background check directly to the company providing the service. 

    1Reply
  • Meghan Reed
    Investor · West Suffield, CT · Member since 2013 · 106 posts · 42 votes
    10y

    I charge $35/adult.  We have had to turn down a couple people after running their credit history and while they weren't thrilled to lose the money they understood it was non-refundable.

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  • Account Closed
    Investor · Chicago, IL · Member since 2014 · 169 posts · 29 votes
    10y

    I use smart move so the applicant pays online. I let them know that if the lease is signed then I take the $35 off their first months rent check.

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  • Arthur Banks
    Real Estate Investor · Waukegan, IL · Member since 2013 · 367 posts · 80 votes
    10y

    I use rentapplication.net.  They charge the applicant $39.95. I charge nothing. 

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  • Joe Kol
    Anoka, MN · Member since 2015 · 8 posts · 5 votes
    10y

    I advertise my units with an application fee, but dont charge them anything. At first I didn't charge a fee, and advertised this, then I scheduled 13 showings for 1 day and only 2 people showed up (One guy was 2 hours late). 

    Charge them a fee. It's not about the money, it's about not wasting your time. Only serious people will respond to your advertising. 

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  • Bob H.
    Rental Property Investor · Cedar Park, TX · Member since 2014 · 415 posts · 272 votes
    10y

    I just reduced my fee from $40 to $30 per adult, because my screening company, National Tenant Network, changed its pricing structure in a way that lets me order one report rather than two for each applicant and still get both a tenant screening score and a national criminal background check.

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  • John CasmonPro Member
    Cincinnati, OH · Member since 2013 · 1k+ posts · 1k+ votes
    10y

    Like others, I use MySmartMove and the tenant pays for the report. 

    @Dave Meyer - If you're getting up to 100 responses within 24 hours of a posting, your price is probably too low. How many applicants are you getting? How are you tracking current market rates?

    1Reply
  • Steven Anderson
    Investor · Spring, TX · Member since 2015 · 126 posts · 38 votes
    10y
    Quick question. If you screen multiple applicants and they all qualify do you tell the applicants you will give a lease to whomever is willing to sign a multi year lease?
    0Reply
  • Ronald PerichPro Member
    Investor · Granite City, IL · Member since 2014 · 658 posts · 301 votes
    10y

    @Arthur Banks

    I also use rentapplication.net. I like their site because I can take customize the application to include any questions I want to include. That was the biggest drawback I saw with all of the other sites. They only had the questions they wanted to have. I couldn't ask about pets, smoking, how long they planned on staying, etc.

    The other nice feature is the applicant can upload supporting documents like a driver's license and pay stubs. So I have everything in one place and it's all done at one time. 

    And while I think the $39.95 fee is high for the applicant, I do think it's a deterrent to those who wouldn't qualify. I make it clear that they are paying the company, not me, and I receive nothing from the application process.

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  • Arthur Banks
    Real Estate Investor · Waukegan, IL · Member since 2013 · 367 posts · 80 votes
    10y

    @Ronald Perich That's exactly why I use them. I wanted the customization of my questions. I try to ask open ended questions. For instance "What type of pets do you have? Then the text field sub questions Name, Type, Breed, Weight and Color (One pet per line). There's a check box titled None. People love their pets and I think this lets their guard down.  I'll ask "How often do you smoke?" And I really like "How many times have you been evicted from a tenancy or left owing money?" Never, 1, 2 or more. Please explain."

    @John Casmon I just listened to your podcast (I believe on The Best Ever).  Good stuff.

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  • John CasmonPro Member
    Cincinnati, OH · Member since 2013 · 1k+ posts · 1k+ votes
    10y

    Thanks @Arthur Banks

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