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How Much Should Landlords Charge for Rental Property Application Fee – A Comprehensive Guide

Property Management and Tenant Placement

How Much Should Landlords Charge for Rental Property Application Fee – A Comprehensive Guide

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When it comes to renting out a property, landlords face a variety of questions, one of which is how much should they charge for a rental application fee?

This is an important decision, which can have a major impact on the financial health of a landlord’s rental business.

After all, if the fee is too low, it may not cover the costs of processing all the applications, whereas if it is too high, it may discourage potential tenants from applying. In this comprehensive guide, we will provide an overview of how much landlords should charge for rental property application fees, as well as some tips to help them make the right decision.

Overview of rental property application fees

When landlords first start renting out a property, one of the most important decisions they will make is how much they should charge in application fees.

Application fees are non-refundable payments that tenants pay upfront to be considered for rental housing. Landlords can charge application fees for both rental houses and rental apartments.

The amount varies depending on the landlord’s location, property type, and the length of the lease. Application fees cover the expenses associated with screening potential tenants, such as credit checks, background checks, and employment verifications.

They are non-refundable and are usually due when a potential tenant starts the application process. While landlords can legally charge whatever amount they like for application fees, it is important to remember that high application fees can be a major deterrent for potential tenants.

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Factors to consider when setting an application fee

There are several factors that will help landlords decide how much to charge for application fees. To make an informed decision, we recommend landlords carefully consider these factors before setting an application fee.

Average rental application fees in the U.S.

The average rental application fee in the U.S. is $37, but this varies based on location. For example, landlords in the Northeast and Midwest charge an average application fee of $35, whereas those in the South charge an average of $42. Rental application fees in the West Coast average $44, with landlords in California charging a whopping $51. These average amounts can help you decide how much to charge for your application fees, although you should keep in mind that application fees are negotiable.

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Tips for setting an effective application fee 

To set an effective application fee, landlords should consider the following:

Location – Application fees are often higher in highly populated areas, as they are more expensive for landlords to screen tenants. In these areas, landlords may decide to charge application fees to cover their rent costs. Alternatively, landlords may charge an application fee that is lower than the expected average, to encourage more tenants to apply for their rental properties.  

Property type – Application fees for rental houses are usually lower than for rental apartments, as it is less expensive to screen tenants for houses. Landlords should take other factors into account when deciding how much to charge for application fees, including the cost of screening tenants, the average length of the lease, and more.

Lease length – The average length of the lease can also have a significant impact on how much landlords charge for application fees. For example, landlords who offer short-term leases may charge less than those who only offer long-term leases.

Income source – Landlords who are receiving government assistance may decide to waive the application fee completely or charge a significantly lower amount. While this may be a good idea for landlords who are receiving rental assistance, it can backfire for those who are not.

Number of tenants – If a landlord is hoping to have many tenants apply for their rental property, they may consider waiving the application fee completely. Alternatively, landlords who only want one tenant to apply may decide to charge the maximum amount.


Can Co-Applicants And Roomates Be Charged As Well?

In the case of multiple applicants, the landlord can and should order screening reports on every adult (including grown children) who will reside on the property. If you screen only the primary applicant, you may run into trouble if a co-applicant stops paying rent or moves out suddenly.

You’ll likely have a higher chance of receiving rent on time if everyone living in the unit meets your financial criteria. You’ll want to be sure that you don’t miss a prior eviction, relevant criminal record or low credit score that may only show up on one person’s report.


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Landlords can charge tenants an application fee if it is disclosed in the rental listing.

Therefore, the amount of the application fee is entirely up to landlords, if they are transparent about it. This means that landlords can charge any amount for application fees if it is clearly stated in the rental listing.

That said, to avoid discouraging potential tenants from applying, it is important to charge an application fee that is not too high or too low. If your application fee is too low, you can increase it gradually over time. Alternatively, if it is too high, you can lower it as soon as possible.

The important thing is to keep in mind that application fees are negotiable, and can be adjusted whenever

At Rent Portland Homes – Professionals we specialize in managing rental properties in Portland Oregon and our team saves owners the time, money and hassle of managing their rentals themselves.

To learn more about the services we can offer you, contact us today by calling (503) 791-4610 or click here to connect with us online.