I don’t find myself being amazed at things very often, but I have to admit I was taken aback when I saw a large property management firm change their application fee from $25 to $200. My initial thoughts were, “who is willing to pay that?” and “how can I justify charging that much for a rental application fee?”
Security – You should never compromise on this when you are considering space for your business. Check the neighborhood, security arrangements of the building or area where the property is located and find out more about the rate of crime in the area. Is there any arrangement for night security?
If you are involved with industrial space leasing, you have to find out more about the company which is involved with the security of the place. If security arrangements are not good it can be too risky for your business.
Another thing I liked is that the property management firm refunds the $200 application fee if the tenant is approved. Now, good applicants know there is no risk to applying at $200 a pop. This property management firm is using price to lower the amount of resources needed to screen applicants (by lowering the number of applicants themselves!). They are also freeing their people up to work on higher margin activity (like filling the rental properties with their smaller, but better, applicant pool).
What’s not to like? Should every firm go to $200 per rental application? As I racked my brain to figure out why I shouldn’t raise our rental application fee to $200, I came up with several reasons: Applicants who don’t qualify will get really angry; not $25 loss angry, but $200 loss angry (which could equal the money earned in several days of work). This can really stress out employees and make it so they want to work for someone who has $25 application fees and not get screamed at everyday.
Upon hiring, agree on an account to place all rent deposits. Have the business sign on to this account along with your name. This way, you will have access to all funds, should there be any disputes.
In order to avoid rent being pocketed by your managing company, request that a monthly roster be made all tenants with current contact information. Some companies may say an apartment is vacant when a resident still lives there and keep the rent money.
I still think it’s a great idea; I’m curious to see how it will work in practice. I’m still a middle-of-the-road $75 rental application fee believer, but am ready to be convinced otherwise!
Paul Amos is an Author His latest website is about Request a home loan, Mortgage Refinance, home equity loan Hidden Mortgage refinancing loophole exposed
