If you rent property, it's important to know what to charge for rental applications. According to recent data published by Forbes, approximately 34 percent of occupied housing units in the U.S. are rentals.
Knowing what the typical rental application fees in Denton, TX are in advance will help you instill confidence in prospective tenants.
Read on to learn more about what a property management company tends to charge for rental property application fees.
What Are Application Fees?
As a landlord, you want to make sure that you choose the best possible tenants. To do so, you may need to run things like a credit check and a criminal background check.
These types of "checks" cost money, so they're usually included as a total rental application fee. By performing these checks ahead of time, you can move forward with a new tenant in confidence.
Some fees may also go to the property management company that processes the applications. Overall, the fees are designed to cover your costs so you're not losing money.
Property Management Company: Typical Fees
While every property management company is different, rental application fees also vary depending on the state. For example, some states may have a cap on how much a landlord is allowed to charge.
In general, these fees vary from around $20 to $50 in total. However, some application fees may go as high as $100, but this usually applies to areas with high-demand properties or tight real estate markets. There is no cap on these fees in the state of Texas.
The rental application fee should only go toward covering administrative costs. It's not meant to be a source of passive income, so make sure you charge according to what it costs to process the application only.
Other Important Information
You may choose to waive rental application fees if you prefer to do so. However, most application fees that are charged to possible tenants are non-refundable, so it's important to make that clear to applicants in advance.
Depending on the terms of the rental lease, the application fees may go toward the first month's rent for the approved tenant. While this is not typical, it might be something that landlords choose to use as an incentive if they want to.
Even if someone pays their rental application fees, you are allowed to deny their application after it has been processed. This might apply if the person has a criminal background, a low credit score, or if they fail to provide adequate references and/or proof of income.
Start Renting Your Property Today
If you're still unsure about rental application fees, a qualified property management company can help. They'll establish the proper procedures for applications and help you navigate the process from start to finish.
Landlords in the Denton, TX area can get help and expertise from the staff at PMI United, Denton's premier property management source. Get in contact with us today to find out how we can help you get the most return on your real estate investment.
