Application fee for tenants

[Jorge Soto]

Hello BP community!

I am buying a triplex and both tenants are staying so my question is. Do you charge a tenant an application fee when you take over the property? This is my first investment property so I am not sure what is normal. Any advise on what you have done in the same situation.

[John Hyatt]

Hi Jorge, 

Are they month to month tenants? if not I do not see a reason to charge an application fee. Even if you run the application and they are not tenants that you would have put in there, it doesn't matter because you inherit the lease and if they haven't broken the lease you still have to keep them for the most part. Also, if they pay rent on time and are solid tenants (I know you may not know now, but will find out soon enough) it really wouldn't matter what the background said, right? If you are trying to charge an application fee to make money I would be careful because I think there are specific laws regarding application fees and I think you actually must run some form of a background check at least that's how it is in AZ. 

-John