If you’re a landlord considering application fees, there are a few factors to weigh. When a renter submits an application, will you screen the person to see if there's a good track record of handling financial responsibility? Most likely you will, but screening tenants can cost money, so how do you cover those fees?
Landlords typically charge applicants a fee to run background and credit checks. When you receive interest in your property from potential applicants, one of the first questions they will likely ask is about the application fee.
What is an apartment application fee, and why is it needed?
An apartment application fee is a one-time payment prospective tenants make to fill out a rental application for an apartment. While the exact price of the fee can vary nationwide, most landlords charge it. In rare cases, a landlord won’t charge this fee if they are already familiar with the applicant. The fee can cover various expenses, such as credit checks, background checks, and the rental application process.
What is a standard application fee for an apartment?
Most rental application fees cost about $30 per person because application fees generally cover the cost of screening a tenant. Therefore, you should only use the money for applicant screening procedures. Depending on your state, the application fee may not be higher than the cost of a background and credit check, so check state law regarding rental application fees.
To collect an application fee, you may either do so through an online platform or via cash, check, or card. You may charge what you’d like for an application fee (as long as you follow legal requirements), and remember that you don’t want to deter potential tenants from applying to live at your property.
If the fee to apply is too high, they may apply elsewhere. If the fee is too low, you may get a large number of applicants but find that not all applicants have a serious interest in renting your property.
What are the legal requirements for application fees?
State laws regarding application fees can differ significantly, so you must clearly know the rules and regulations in your own state. Both renters and landlords should check their state laws on this subject. It will keep both parties in the know to avoid an improper application fee. As a landlord, be sure that you are using best practices for the pricing and policies of your application fee.
Are rental application fees refundable?
In some circumstances, particularly in hot rental markets, you may end up renting your property to an applicant while you have the applications and fees of other applicants still pending. This situation gives you options if one applicant doesn’t meet your standards for renting the property, and it can keep you from missing out on a potentially great tenant just because they weren’t the first to apply.
Should each tenant pay an application fee?
Every person on the lease over 18 should be charged an application fee because you will also need to run their background and credit checks. Application fees for apartments are not per unit.
Do tenants pay an application fee before viewing the property?
Keep in mind that the purpose of an application fee is to cover screening costs. Touring a property does not require such costs and is a separate part of the rental process. An application fee is due at the time that an application is submitted.
Why should landlords run background and credit checks?
If you don’t plan to run background and credit checks on potential tenants, an application fee should not be required. Most landlords find it vital to screen their applicants, however. Running a credit check will help you get a clear sense of a potential tenant’s financial history, and a background check can reveal a criminal record or other red flags such as prior evictions.
Apartments.com makes it easy to screen applicants, get the information you need, and find a qualified renter fast at no charge to landlords! We partner with TransUnion to provide you with screening reports for evictions, credit, and criminal history.
Another feature you’ll find on Apartments.com is support for co-signers, guarantors, and co-applicants. If you need more information to make a decision, you can request supporting documents from potential tenants directly on our platform.
Take advantage of our host of FREE rental tools for landlords and get all the information you need to find the right tenant quickly and easily. Take the first step and create a user account today!
Frequently Asked Questions
1. Should landlords charge a rental application fee?
Though landlords are not obligated to charge apartment application fees, landlords should use the fee to cover the costs of background and credit checks. Additionally, these fees can help ensure that only serious applicants apply.
2. What should landlords do if a tenant disputes the application fee?
Landlords should review state law and provide documentation of the costs covered by the fee. Open communication can help resolve disputes amicably.
3. Is the rental application fee different than a deposit fee?
Yes, they are different. The deposit is a flat amount a tenant pays their landlord at the start of a lease. A landlord holds onto this money in case their tenant damages the property.
Once a lease ends, the landlord inspects the property for damages. If there are none, you will return the deposit to the tenant. If there are damages, you will subtract repair costs from the deposit amount and return the remainder of funds to the tenant.
Comparatively, the rental application fee covers the cost you paid to conduct the screening, credit, and background check. This money is typically not refunded to the applicant. Check state law for applicable conditions.
4. Do renters pay a fee to apply for rentals on Apartments.com?
Yes, renters pay $29.00 + tax to apply to up to 10 rentals on Apartments.com within a 30-day period. The processing fee covers a credit report and background check, which are provided by Transunion and are shared with the landlord. Landlords must create an account and make their property listing available to accept applications on Apartments.com.
Previously updated November 12, 2024
