Why Every Landlord Should Charge Rental Application Fees

Why Every Landlord Should Charge Rental Application Fees

Why Every Landlord Should Charge Rental Application Fees

Once thought to be a tool to price-gouge future residents, rental application fees have actually proven their worth. In 2006, Utah’s Rent Control Prohibition Act was amended to add a list of fees that are set by the market and cannot be regulated or prohibited by the local government. To renters and non-landlords, this change could be seen as a potential money grab by landlords and property management companies. However, in the years following the amended act, rental fees have proven to be well worth it. There a variety of reasons landlords should be charging rental application fees. Overall, it is only beneficial for you as a landlord to begin requiring this fee and we have a few simple reasons as to why.

Why Do Apartments Have Application Fees?

The most common reasoning for this type of fee is generally to cover the expense of conducting a thorough background check. This typically includes:

Pulling a credit report

Reviewing any criminal history

Checking the sex offender registry

Conducting financial qualification

Reviewing any rental history

Background checks may not seem that important, but they are actually extremely helpful to landlords and beneficial to renters. When proper and thorough background checks are conducted the result is lower crime rates. Landlords are more likely to conduct these background checks if they charge fees that cover the cost. If renters are hesitant to pay this fee, it’s good business practice to inform them what this payment is going towards and that if they are rejected, it is refundable. The purpose of rental application fees is not to provide additional income to the landlord, but to screen applicants to ensure responsible tenants.

What is the average application fee for an apartment?

How Much is the Average Application Fee for an Apartment?

While this fee varies from state to state, renters can expect to pay anywhere from $30 to $60. As stated earlier, this pricing is determined by the market and is not dictated by the local government. That means this price can and should fluctuate as necessary. However, it’s in a landlord’s best interest to make it well-known to future renters that this fee is typically per renter over the age of 18, and is not a flat fee for everyone who will be living in the home. Being upfront about all upcoming and existing fees is best practice for successfully managing a property.

Why Are Rental Application Fees a Good Idea?

While there are many benefits for charging application fees, we have three top reasons for this extra charge.

Reduce Risk

This is a broad reason that encompasses many things, but it is important. By placing qualified tenants, you reduce the risk of damage to your property and the property of your other tenants. A successful background screening will bring up reasons why you wouldn’t want an individual renting from you. If they have a poor renting history, you can find this out before it’s too late and your property ends up being ruined. With a criminal background check, you can also reduce the risk of anything happening to your other tenants. A simple fee can save you thousands in damages later on down the road and gives you peace of mind from the first day a new tenant starts renting from you.

Reduce Costs

Unfortunately, thorough background checks aren’t free. Requiring one for every prospective tenant can add up very quickly and you’ll be the one footing the bill. Unexpected fees happen in property management, but this is a cost you can prevent. Requiring future renters to pay for their own screening makes running your business more cost-effective and will save you money in the long run.

Deter Unqualified Renters

Sometimes the rental application fee can serve as a qualifying process by itself. This ultimately saves you time by weeding out potential tenants who don’t think they will qualify before they even fill out the application. Not only do you save money, but this also makes you renter screening process more efficient. When you’re upfront with all prospective renters about the fees that will be required, you gain the trust of those who will qualify and give unqualified renters a chance to find another home.

Why do apartments have application fees

Rental Application Fees Are Important and Necessary

So, by now you should see why application fees are critical to successfully managing any property. At Wolfnest, we take care of the screening, fees, and everything else in between for you. This gives you less time to worry about your rental property and more free time to spend with family, take vacations, and pursue other hobbies. We require an application fee for all future renters and look into a variety of other types of criteria such as employment, income, and credit history. Our goal is to keep your rental property or apartment in prime condition with tenants who feel the same way. We want you to get the most from your investment and we’re here to help achieve that goal. At Wolfnest, we take care of all the small details you may not have time to look into and ensure that your property will be well taken care of. So, a great place to start is requiring a rental application fee and finding the perfect renters for your building or home. Learn more about other property management services we provide and contact us today!

How to Market my Utah Rental Property?

How to Market my Utah Rental Property?

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So you have decided that you are going to rent out your home, the next logical question you will probably ask is: How do I find a qualified tenant? There will always be quality people that are looking for a Utah rental property, but you will need to actively seek them out. Here are some tips that will help you find the right tenant and start covering your mortgage each month:

 

  • Put a Sign in the Front Yard – This might seem like the most obvious marketing tip in the world, but it always amazes me how many owners don’t do this. By putting a sign in the yard, it will not advertise to potential tenants that drive, but it will also let your neighbors know that the property is for rent. If your neighbors really like the area, they will let their friends and family know about any available properties. It really is amazing how many rentals are filled this way, and how inexpensive this advertising is.
  • Make Sure your Property can be Found Online – Oh, how the times have changed! In today’s market, more than 80% of prospective tenants begin their search online for a Utah rental property. There are so many free classified ad websites on the Internet, as well as many inexpensive sources that specifically target renters. This makes it easy to market your home to a wide range of people. If done correctly, your property may only remain vacant for a few days!
  • Tell the World About your Property – You should never be ashamed to pitch your rental property to family, friends, and related professionals. Maybe your brother has a friend that is looking for a home to rent or your friend has a co-worker that needs to lease a place. In addition to these people, your real estate agent and mortgage broker are great resources for finding interested tenants. They are constantly working with individuals that would like to purchase a home, but can’t for a variety of reasons. This word of mouth advertising does not cost you anything and can be very effective.

 

There is no shortage of things that you can do to get your Utah rental property filled with quality tenants. They do exist, but you really do have to be proactive in finding them. If you have any questions about how to market your rental home for prospective tenants or if you are considering hiring a property management company, please contact us at FRE Property Management. We are the premier property management company in Utah and will provide you with the peace of mind knowing that your investment is being taken care of. Contact us today at 801-673-5692.