In the US, it costs an average of $20 to $50 to submit an application fee for a rental unit. Some landlords charge more for luxury unit applications, while owners in lower-rent areas may nix this charge altogether.
If you are a landlord in Richmond, VA, you may wonder how much to charge prospective tenants to fill out a rental application. A property management company can advise you on what to charge to attract the right tenants.
Whether you use a property management company or not, this guide can help you determine the best application fee to charge based on your business model and goals as a landlord.
Average Application Fees in Richmond
Title 55.1-1203 of the Code of Virginia requires landlords to charge an application fee of no more than $50. If you are a Housing and Urban Development (HUD) landlord, you can't charge more than $32.
Another rule landlords should remember is that application fees must be refunded in certain cases. For example, if you deny a prospective renter's application, you must return the fee within 20 days.
What Do Application Fees Cover?
Application fees cover the cost of processing and screening a new renter. The fee may go toward verifying credit history, performing criminal and/or eviction background checks, and administrative labor.
The Benefits of Application Fees
Landlords do not have to charge application fees if they don't want to. However, we always recommend applying this fee to prospective tenants to help you identify serious applications and cover associated business costs.
Identify Serious Applicants
Can you imagine how many applications you would receive if you allowed just anyone to submit one? Charging prospective tenants to fill out an application greatly reduces the number of applications you must review.
Rental fees allow you to ensure only prospective tenants who are serious about your property apply, reducing the administrative burden on your term.
In Virginia, you will also save money because you won't have to refund as many application fees for the tenants you reject. But that's not the only way you'll save money.
Cover Your Costs
Application fees are a smart way to recoup time and money spent reviewing and checking tenant applications. Most landlords pay third parties to run background and credit checks, which can get pricey.
The fee also covers the cost of administrative labor, or the time it takes to manually review the application. Your team will need to spend time verifying information on the application to ensure the applicant is responsible.
Looking for a Richmond Property Management Company?
In Virginia, the most you can legally charge a prospective tenant to fill out an application for your unit is $50. This fee will help weed out casual applicants and cover the cost of screening prospective renters.
Are you searching for a property management company in Richmond, VA? Renters Warehouse is here to advise you on the best application fee to charge your tenants. We can also help you with tenant screening, rental collection, and more!
Contact us today to learn more about our property management services.
