A bad tenant can cost you your sanity and hundreds, sometimes thousands, of dollars. Hampton Roads, Virginia, landlord can reduce their risk of renting to bad tenants by conducting criminal background checks.
Tenant screening services can get expensive, which is why many landlords charge an application fee. This fee goes towards the cost of running these tests, but how much should you charge?
Your property management company can help you understand state laws regarding these fees. Keep reading to learn more.
Why Do Landlords Charge Application Fees?
A Hampton Roads landlord will charge an application fee to cover the cost of processing information. Running a background check is common in all states and is a non-refundable fee.
The money goes towards the hard and soft costs of running a background check. It pays for the information received and the administrative time spent reviewing the findings and cross-checking any information.
Landlords aren't legally required to charge this fee, but it's good practice to do so. Without these fees, you won't be able to conduct standard tenant screening or will have to pay out of pocket for the services.
A property management company can conduct these screenings for you to find quality tenants.
Average Rental Application Fee
Application fees can range in price by state and jurisdiction, but the standard is $30 per applicant. You can charge a fee for every applicant on the lease since you will have to complete a background check for each of them.
If your rental property is in a desirable neighborhood, you might be able to charge more for an application fee. Although $30 is the average, these fees are known to rise to $200.
In Virginia, rental application fees have limits. A landlord can only charge up to $50 for an application fee used to pay for tenant screening.
Applicants should pay this fee when they submit their rental application. Include details about the fee amount, how to pay it, and the deadline for paying on the form. Make sure to state that the fee is non-refundable to avoid disputes.
Tenant Screening Laws
Background checks cost money to conduct, so many states have laws stating that application fees are legal. However, you cannot run a background check on an applicant who has not consented to one.
Property managers can help you create applications that include provisions about legal background checks. This allows the applicant to read over the conditions and consent to the process while filling out other important information.
Charging to screen tenants can discourage unserious applicants. Those who believe they will be rejected based on their background check are unlikely to pay a non-refundable fee, saving you time as a landlord.
How Can a Property Management Company Help?
A property management company in Hampton Roads, Virginia, can help you build personal wealth, starting with application fees.
While these fees don't add to your rental income, they go towards conducting background checks to find tenants who will pay rent on time. At Renters Warehouse, we've been handling rental property tasks since 2007.
We can ensure you stay compliant as a landlord by only charging the maximum fee legally allowed for applications. Our professionals can create legally binding documents that include important provisions about non-refundable fees.
Let's start making passive income! Contact us today to learn more about our services.
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