When tenants complete a rental application, they may need to pay a fee to cover various costs. Depending on location and market, these individual fees can vary from $35 to $85, on average.
If you're working with a property management company and have a rental property in Akron, it's important to understand what the typical application fees entail.
Read on to learn more about rental application fees, which ones are typical, and what you should charge.
What do Rental Application Fees Cover?
The purpose of charging a rental application fee is to cover the cost of key things like tenant screening and background checks. A professional background check is costly, so landlords pass that fee to the prospective tenant.
There is no law stating that a property management company must charge these fees. However, if a landlord is serious about a new tenant, the fees cover the cost of performing the appropriate tenant screening procedures.
In most states, these fees are final and non-refundable. For example, there is no limit to how much the fees can be in the state of Ohio, and all fees are non-refundable.
How Much Should a Property Management Company Charge?
If you're a real estate investor in Akron, you are legally allowed to set the rental application fees to whatever amount you choose. However, the average fee is around $30 per applicant or application.
Rental property in a hot or tight market may see higher application fees. This helps to ensure that you're only screening serious tenants and shows that an applicant is serious about wanting to rent the property.
Some cities and states see fees as high as $50 to $200. It's entirely up to you to determine how much you want to charge potential tenants based on current market conditions or the cost of tenant screening.
Tips for Landlords
Before you put your property up for rent, make sure that you're following a few important tips. First, be clear and transparent about the rental application fee you're charging and make it evident to the applicant right away.
It's also wise to let the tenant know upfront that the fee is non-refundable, regardless of whether or not their application is approved. You should also explain why you're charging a fee and what it covers.
If you prefer, you can refund the application fee to anyone whose application is denied, or if you simply decide not to approve a tenant, in the name of fairness. However, you're not legally obligated to do so. If you have to pay extra costs to pay for background checks, then it's in your best interest to keep the fee to cover those costs.
Start Your Tenant Screening Process
If you're ready to begin the rental process, make sure you enlist the help of a trusted property management company. With transparency and fairness, you can charge a rental application fee that protects your investment.
To get started on your rental property journey, contact the team at PMI Cuyahoga Valley RAL to find out how we can help today.