Did you know that the average landlord spends around $23,679 annually just on expenses? Application fees are a time-tested method of weeding out applicants who aren't serious while also helping to offset some of these costs.
So, how much should you charge for a rental application fee?
We’ve compiled everything you need to know about these fees, including how much to charge. By reading this article, you’ll be able to make an informed decision about whether or not to charge rental application fees – and if so, how much. Read on to learn more!
Why Charge a Fee?
Charging an application fee might seem unnecessary, but if you expect to receive a lot of applications, it might be a good idea.
Combing through potential applicants takes time. Tenant application fees can help to offset the costs associated with processing the applications. This includes the cost of running a credit check and the time it takes to review the application and verify the information.
Charging a rental application fee can also help weed out tenants who are not serious about renting the property. After all, if a potential tenant is unwilling to pay a small fee upfront, they may not be the most responsible tenant.
How Much Should You Charge?
The national average for rental application fees is around $25 - $30. However, you may choose to charge more or less depending on your specific situation.
Some landlords charge a flat fee, while others charge a per-person price. For example, if you have a two-bedroom apartment and charge a $30 rental application fee, that would be a flat fee.
On the other hand, if you charge a $30 fee for each person who applies, that would be a per-person fee. The per-person fee would pay for a background check for each potential tenant.
Ultimately, the decision of how much to charge is up to you. Just make sure that the fee is clearly stated upfront, so there are no surprises for the potential tenant.
Are There Application Fee Regulations for the State of Florida?
In the state of Florida, there are no laws regulating how much landlords can charge for rental application fees. However, some cities or counties within Florida may have their own regulations.
Should Rental Application Fees Be Refundable?
Some landlords choose to refund the fee if the applicant is approved, while others keep the payment regardless of whether or not the applicant is approved.
There is no right or wrong answer here – it's simply a matter of preference. If you do choose to refund the fee, be sure to clearly state this in your rental agreement or lease so that there is no confusion later on.
The Bottom Line
In conclusion, it is important to consider your time and resources when accepting new tenants.
Rental application fees are an important part of the landlord's business model. They help to cover the costs of processing applications, running credit checks, background checks, and verifying information on rental applications.
A property management company may be a valuable resource when it comes to questions about rental application fees. They can help you make the best decision for your business and assist you with your tenant search. Check out some of our other landlord and owner resources for more helpful tips!