There are over 20 million rental properties in the United States, with millions more Americans looking to rent a space of their own. When renting a property, your retail application fee is a crucial first step during this process.
But what are rental application fees? What should you expect to pay or charge during the rental application process?
That's what we're here to look at today. Read on to learn more about typical rental application fees and how they're determined in the U.S.
What are Rental Application Fees?
Rental applicants are usually required to submit an application fee. These fees are non-refundable and help cover the costs of certain application services, such as a rental background check.
Because most rental application processes are online these days, an application fee might be used to cover software fees. It also compensates the landlord and their team for the time spent reading each application.
As such, rental application fees are used to cover all the services used when processing and screening each applicant. This includes labor and other out-of-pocket expenses.
How Much Should You Charge or Be Charged?
Since rental application fees are used for labor and other costs associated with processing an application, the end costs can't be used for revenue. Rental application fees do vary, however, for a number of different reasons.
The housing market and the location of each property affect costs. If you're applying for more expensive properties, the rental application fees are usually higher.
Most rental application fees are in the $50 range. Some can be as expensive as $100 for each applicant.
Some states like Massachusetts don't allow property owners and managers to charge application fees. New York has a $20 limit for application fees.
Research your state laws to see if there are any exceptions. That way you can avoid charging too much or prevent yourself from paying too much for rental application fees.
Best Practices for Rental Application Fees
If you're a property owner or manager, make sure you calculate all associated apartment fees as it relates to applications. How much will a rental background check or rental credit check cost?
For prospective tenants, always research your state's rental application fee laws. There are always legal limitations that both tenants and landlords should know about when completing the application process.
Property owners should be upfront about application fees. They should also be ready to explain or break down the fees if necessary. Tenants should be comfortable with asking about application fees at all times.
Understand that rental application fees are non-refundable. For tenants, that means budgeting that out when filling out an application, and making sure other tenants do the same if it's a multi-person unit.
Understand Apartment Fees
Rental application fees may be confusing to some, especially since they aren't refundable. Use this guide to help you understand what these fees are and how they are determined.
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