Processing an applicant for a rental property can create expenses that need to be considered when pricing the rental application. This can also depend on whether you are collecting an application online or on paper.
If you are taking an application online some of the items to consider include merchant fees, bank fees, website and software support costs, data storage fees, the cost of the credit reports, credit card fees, screening staff, and support staff.
It is important to check your local laws as there may be restrictions on profit from a rental application.
What is the price range?
Prices of rental applications can vary greatly depending on location, property type and tenant market. A luxury rental in downtown Denver is going to be a much different cost than a Section 8 single family house. Either way it is important to consider the amount based on these factors.
Over the years with building websites for property management, we have encountered application fees as low as $5 and as high as $175.
What factors to consider when pricing your rental application?
The most important factors are the cost that you incur. Make sure to look at the time of your staff or yourself and how long it takes them to process an application.
Other factors depend on if you are doing a background check and criminal history and if those reports add expense to the process.
Do I Charge per applicant or per application?
It is important to consider if you are going to charge per application or per applicant as that can change level of your expenses,
A per applicant fee looks at every person that is 18 years old or older that is going to be residing in that property and charges each one.
A per application fee does not consider the people applying and bases the fee of the household instead. This method is not popular or ideal as the fees of gaining reports can change depending on the amount of people that need to be screened.
Over and above the most important thing to decide is what you are trying to accomplish. If you are trying to get the information to make a good decision without having to incur the costs then relying on software to screen an applicant for you may be the answer.
We built RentScreener from working with property managers directly for years and it gives you the necessary information on a RentReport without costing you anything. RentScreener pays all of the fees and it is funded from the application cost.
Take the guess work out of screening tenants and screen your applicant today.