The average Fredricksburg, VA, rental property is $1,766 to $2,179 monthly. These prices range from apartments to single-family units, respectively.
However, landlords must find the right tenants to make this rental income. You want people who'll make timely payments but won't damage the property.
You need tenants to fill out rental applications. From there, you can do tenant screenings. Of course, nothing is free; you can expect application fees, even when working with a property management company.
It's a bad idea to exchange money without understanding why. Keep reading to learn all about application fees.
What Are Application Fees?
Before we explain application fees, let's discuss tenant screenings. These screenings involve:
- Background checks
- Credit checks
- Researching rental histories
- Ensuring tenants are safe and responsible
Rental application fees may also pay for the landlord or rental management company's efforts. For example, the tenant screening costs $30.
A property manager might charge an additional $10 for time spent researching the would-be tenant. You shouldn't charge an application fee if you're not doing tenant screenings.
Are Application Fees Rental Income?
These fees are not part of your rental income. They don't work like security deposits either.
You cannot use this money to cover damages or unpaid rent. Application fees explicitly to help fill vacancies with responsible renters.
You'll have to return the money if you decide not to run the tenant screening. This is to discourage landlords from using the funds as income.
How Much Can You Charge for a Rental Application Fee?
The fee is around $30 per applicant. However, costs differ by state and can change according to the local real estate market.
Some states have specific limits on these fees. Other states have no restrictions as to how much renters may pay.
Application fees are usually non-refundable if you perform the screening. This is true even if the renter changes their mind, though there are exceptions.
Fees in Virginia can't exceed $50. West Virginia has no cost limitations.
New York's can't exceed $20 and must be waived if applicants provide copies of background and credit checks done within the past month. It's illegal in Vermont to charge application fees.
Minnesota mandates any money beyond what's needed for the screening be refunded. Washington state says the application fee must equal what's required for tenant screenings.
Who Pays Application Fees?
Most states say anyone whose name is on the lease must pay the application fee. But there are exceptions.
Some landlords waive fees for secondary renters. Others have applicants pay for background checks themselves.
Want to Hire a Property Management Company?
Application fees are just one part of the complex web of property management. You can handle all the tough landlording business yourself or hire a property management company.
Gem Realty can assist with tenant screening, accounting, maintenance, and rent collection at your Fredericksburg, VA, rental property. You can trust that our team will deliver reliable, professional service with integrity.
You don't have to deal with property management alone. Contact us if you have questions or for management assistance.
