Apartment application fees.

[Alkali Ike]

Without reading all the replies, the management company is paying someone to process the application and they have lights, phone, rent, etc. The old lady isn't paying herself anything. Therein lies the difference.

 

[lunarpollen]

Depending on the particular owner or manager, and on the local rental market, they could be EASILY making profit off of it. Most landlords or property management companies have several properties under their domain. This summer when I was apartment hunting, all the places I looked at had AT LEAST a few applicants per day, some of the larger complexes probably a few dozen per day. Depending on what their costs of doing business are, how much they are charging for the application fee, the local rent price range, how much demand there is in the local market, how much interest there is in the particular property, and a bunch of other things (some under their control, some not), they could conceivably make as much as or even surpass the desired rent amount.

 

[Stumbo]

First off, it is not a sustainable $450/week. Everyone who walks in the door does not apply to the property. This is assuming 3 applications per day

The goal is to rent the apartment. Once all the apartments are rented, then, no more fees.

When I was in the business, out of 20 calls, maybe 6 might come out to see the apartment. Out of the six, maybe 2 or 3 might apply.

I went through the same script for each call, discussed finances and such. Believe me, based on time spent, there no "big" money to be made by attempting to collect excess fees.

One other thing you are forgetting, the prospective renter probably calls on several advertisements, so there is market pressure to keep the application fees as low as possible so as to get as many people to come out to just VIEW the apartment, let alone pay the application fee. If the fees are too high, the prospective renter will not move forward with the process.

 

[seventhson]

In SF, it was common to charge a potential renter for the credit check.

 

[neo 7]

In SF, it was common to charge a potential renter for the credit check.

That is what part of the application fee is supposed to be for, as well as a criminal background check.

I was just wondered if any profit was made from the fee, or the possibility that someone would just forgo the checks altogether and pocket the money. Many people seemed to have missed my point.

 

[Stumbo]

I was just wondered if any profit was made from the fee, or the possibility that someone would just forgo the checks altogether and pocket the money. Many people seemed to have missed my point.

Sure, there is a "possibility" that some fees might be pocketed, as much as there is a "possibility" of any other criminal type activities.

As far as "profit" on fees, as long as an apartment owner has a vacant apartment, the daily loss in rental income, advertising costs, processing costs, lost time, IME, have always cost more than any amount of fees ever collected.

For example, depending on scheduling, it usually takes about 3-5 days to paint,clean, repair an apartment to be ready to show. For a $1,500 a month unit, that's already about $200 in lost rental income. If it takes 15 days to rent, that's $750 lost income and so on. Sometimes, depending on the market, it may take 30 days or more to rent a unit.

 

[bassguppy]

I am a former apartment dweller and I do wonder...

how some of the shady, scummy, tweakers pass a credit and background check in some of the apartment complexes that I viewed. You could say someone else is renting the apartment and the tweaker just lives there but obviously once an applicant moves in some property managers could care less unless an apartment is making meth...

 

[1958Bassman]

I looked at 2 apartments today. The first apt. is owned by a property management company and their application fee is $30. Two other guys showed up when I was viewing the apt. Three potential tenants X $30 = $90. If this apt. is shown to three people per day, five days a week that's $450 per week: almost as much as the monthly rent of said apt.

The second apt is owned by an old lady who also lives in one of the units. She charged me $7 for the application fee. I talked to her about the $30 charge from the first apt. and she said it was total B.S. since the credit check and criminal background check cost her $7, hence her charge to prospective applicants.

I did a quick Google search and didn't find much about the laws in my state (admittedly I didn't look very hard though).

Since I had to leave three voicemails to the property management company I don't think they are trying to make a profit from just showing the apt. But I can definitely see the potential for abuse.

Does anyone know if these companies are making money from the application fees?

How much a property owner pays is based on what is included in the background check. The company I used did criminal, employment and general background check and it cost me $35 per person, with a bit of a discount if I sent three apps in at one time. I had several prospective renters who were extremely eager to move in and one said he would take it sight-unseen, cash up front and cash every month, etc. He was too eager and I'm glad I did the background check because he had two repos, two foreclosures, was delinquent on credit cards and just about every bill I could think of. Another was a recommendation by the mom of a guy I have known since we were 4 and this one was a credit trainwreck, too.

The number of people who will be bad renters is high enough that I won't sign one without at least a credit check unless I just get the feeling that they won't be a problem, like the current one. She came with her mother, has never been married and is very trustworthy.

 

[Stumbo]

The number of people who will be bad renters is high enough that I won't sign one without at least a credit check unless I just get the feeling that they won't be a problem, like the current one. She came with her mother, has never been married and is very trustworthy.

Did you charge the prospective renters an application fee?

 

[1958Bassman]

Did you charge the prospective renters an application fee?

No, I told them about the fee but the ones I didn't trust bailed as soon as mentioned it. The guy with all of the worst credit problems was far too eager and it was worth paying the $35 because it saved me the ton of BS I would have had to deal with if I had rented it to him. Also, several asked where the owner lives and when I said I live upstairs, they turned to vapor- I guess they just didn't want to have the owner see or hear what they were doing. To be honest, I really don't want to rent to guys, especially if they're younger than me. Of the people I know who are married, single or divorced, I have a pretty good idea of how they would act when they would have to deal with their own problems, whether it's the ex, current wife/girlfriend or their friends. When it comes to someone I don't know at all, I'm extremely careful because they're like a wild card and after the last renters moved out, I saw how badly they took care of the place. Apparently, each coming from a rich family meant they didn't know how to, or couldn't be bothered with, cleaning. It didn't look as bad when the place was furnished but empty, I saw all of the dirt. The one who's here now cleans houses for her living and keeps it very nice- I had done a helluva lot of work on the place before she looked at it and if I had rented to someone who was a total PITA, the battle to evict would have probably caused me to sell it ASAP, for whatever I could get.

Some people think that owning rental property is a fast track to the bank with a load of cash but it can be a real nightmare. Renters are hard to evict here in MKE and since I live in the same building, I have more clout if an issue arises. The people who looked at the place must have thought I was a total A-hole because of the things I would/wouldn't allow but it is MY house and they will play by MY rules.

 

[Stumbo]

... after the last renters moved out, I saw how badly they took care of the place. Apparently, each coming from a rich family meant they didn't know how to, or couldn't be bothered with, cleaning. .

I solved that problem by inspecting each apartment (plumbing, carpet, etc) personally twice a year. I have an inspection form (same as my move-in/move-out inspection form) that I use to keep track of problems. If there is any damage beyond normal wear and tear, I bill the resident as we go. Based on the inspections, I created a maintenance to-do list that was done to my schedule. It was win-win because I caught many problems before they became major issues.

I also took pictures of the apartment upon move-in/move-out to support any charges I made against the security deposit. I included the twice yearly inspections in the rental agreement along with many other items. I ended up with about 5 pages of rules based on what residents actually did during their residences.

I also had all the carpets cleaned once a year, splitting the cost with each resident.

If they didn't pay minor amounts, I deducted it from their security deposit when they moved out.

 

[neo 7]

Kinda surprised this thread is still going. Anyway, I got accepted for the apartment with the $30 application fee (I move in on March 1st) and the old lady never called me back. When I was at the property management office to sign the lease and pay 1st months and security deposit I asked, "just out of curiosity, how many people applied for this apartment?" I was told 5, and I was given first dibs since I was the first to return the application.

Incidently, when I looked at the place I was told that there were 3 units available, but the ad is still posted on craigslist.

 

[Stumbo]

Kinda surprised this thread is still going. Anyway, I got accepted for the apartment with the $30 application fee (I move in on March 1st) and the old lady never called me back. When I was at the property management office to sign the lease and pay 1st months and security deposit I asked, "just out of curiosity, how many people applied for this apartment?" I was told 5, and I was given first dibs since I was the first to return the application.

Incidently, when I looked at the place I was told that there were 3 units available, but the ad is still posted on craigslist.

Congrats on getting the apt.

I suggest you take pictures of the apartment, especially any scratches, holes, tears, stains, etc. Be sure and give a printed set to management. Great for when you move out so they don't bill you for stuff that was already there.

 

[neo 7]

Good advice, Stumbo. It's actually something that I had already planned on doing. I've been burned on the security deposit too many times in the past.

BTW, this place has a washer and dryer, no more laundromat for me!

 

[jp58]

The agency that controls most of the apartment apps around campus charges $25 per person or $50 for a group of 4. They discount people that want to live together since it tends to lead to less headache later.

 

[Stumbo]

Good advice, Stumbo. It's actually something that I had already planned on doing. I've been burned on the security deposit too many times in the past.

BTW, this place has a washer and dryer, no more laundromat for me!

Don't forget renter's insurance. The apartment policy doesn't cover your stuff.

I also suggest you keep a very low profile with the music and bass playing until you get to know your neighbors. Headphones are your friend for evening listening/practice.

Also, get your carpets cleaned (with managements permission) once a year. Maybe they have a contractor that will give you a good price?

 

[1958Bassman]

I solved that problem by inspecting each apartment (plumbing, carpet, etc) personally twice a year. I have an inspection form (same as my move-in/move-out inspection form) that I use to keep track of problems. If there is any damage beyond normal wear and tear, I bill the resident as we go. Based on the inspections, I created a maintenance to-do list that was done to my schedule. It was win-win because I caught many problems before they became major issues.

I also took pictures of the apartment upon move-in/move-out to support any charges I made against the security deposit. I included the twice yearly inspections in the rental agreement along with many other items. I ended up with about 5 pages of rules based on what residents actually did during their residences.

I also had all the carpets cleaned once a year, splitting the cost with each resident. If they didn't pay minor amounts, I deducted it from their security deposit when they moved out.

The problem was that it didn't look dirty when I would go in for any reason. They had two cats and the area in the closet where the litter box was seemed cleaner than a lot of the rest of the place when they had moved out. If the litter box area had been a problem, that would have been a definite deduction but it was covered and the cats didn't spray all over the closet. The renters, OTOH,.....

I definitely had some charges but it's never enough when the renter's lawyer is one of their clients.

Before I placed the last ad, I found a site that had legal info and forms for rental property owners and they state that copy & paste of their forms and clauses is allowed, so I did. I picked and chose what I wanted to include but when I clicked on Print, I saw that it would be 26 pages long and I really didn't think anyone would sign a lease that was so comprehensive. I narrowed most of it down to "Any physical damage to the property will be repaired at renter's cost, based on the inspection report, signed by all parties". The rest was boiler plate clauses regarding late payments, criminal activity, theft of my property, etc.

 

[LiquidMidnight]

Also, several asked where the owner lives and when I said I live upstairs, they turned to vapor- I guess they just didn't want to have the owner see or hear what they were doing.

Only speaking personally, even as a musician, I consider myself a good renter and I wouldn't want my landlord living upstairs. I remember when I was apartment hunting for grad school a few years ago, the first place I looked at was this small apartment attached to this guy's garage. The dude just kept going on about how I needed to be quiet and he wouldn't put up with any crazy partying...after I kept reminding him that I was a grad student, not some drunken sophmore. I was starting to get pissed off. Needless to say, I didn't rent the apartment. I knew the guy would be constantly up my ass. My guitarist is in the mobile home business and knows this dude from his other realty stuff; my guitar player kind of rolled his eyes when I mentioned the guy's name. I ended up really digging my landlords that I did go with so much that I actually came back and rented off of them again when I came back to the same university town for my doctorate.

 

[jmattbassplaya]

$1800 is not really that much, at least not here in LA. Rent for my condo was 1500/mo.

That's over $21,000 a year. You could actually make it in Memphis with a salary like that. You wouldn't be comfortable or in a great area, but you could definitely make it work.

 

[MatticusMania]

That's over $21,000 a year. You could actually make it in Memphis with a salary like that. You wouldn't be comfortable or in a great area, but you could definitely make it work.

Thats not even my salary. That 1800 number was tossed out there just to consider how much could be made off of those fees alone, I believe (not my numbers).
My "salary" is a lot better than that, which is why I was able to afford my half of the 1500/mo. Now Im saving 750 a month not paying rent.