According to the National Equity Atlas, renters represent 49% of Denver, Colorado's population, or about 312,600 people. It is a considerable increase of 31% compared to 2000!
All those facts and stats show how becoming a Denver landlord and renting out properties to tenants can be an income game-changer. However, it also comes with many responsibilities, including screening applicants and charging appropriate application fees. A reliable property management company can help with this, but it still pays to know these fees to ensure fair practices and avoid legal issues.
Luckily, you've come to the right page. In this guide, the team of rental property management experts at PMI Aspire shares tips and insights into application fees. Please read on.
What Are Application Fees?
Application fees are the charges that landlords or property management services impose to process rental applications. They serve specific purposes:
- Covering the costs of background checks and credit reports
- Paying for the administrative processing of the rental application
- Ensuring only serious applicants apply, saving time and resources
Do Application Fees Change?
As noted by LawDistrict.com, the average application fee in the U.S. is $30 per applicant. Each state enforces varying laws, with some restricting the amount while others do not limit it. In Colorado, including Denver, there's no legal limit.
Application fees can also change based on several factors:
- The type of property you're renting out (e.g., single-family home vs. an apartment)
- Market demand, which could affect competitiveness and pricing
- Discounts or waivers that landlords or property management companies offer at their discretion
Why Are Application Fees Important?
Understanding application fees is essential for several reasons:
- Gauge the seriousness of a rental offer
- Give your insight into the rental property management firm
- Contribute to your overall budget as you search for prospective tenants for your rental properties
Application fees are just one step in searching for potential renters, especially in a competitive market like Denver. Make sure to factor these into your budgeting considerations and include them when updating records and accounting for your rental real estate investment costs, expenses, and income/profits.
How a Reputable Property Management Firm Processes Applications
A reliable, well-experienced property management company implements the following best practices concerning rental applications and associated fees:
- Creating a well-written and transparent rental application form
- Explaining in writing what the application fee covers in detail
- Noting that the fee is non-refundable
- Keeping receipts and confirmations of payments received
Following the above helps managers and landlords avoid surprises and make informed decisions while processing and screening prospective renters.
Simplify Rental Applications With the Help of a Property Management Company
Understanding application fees is fundamental to being a respected, successful landlord in Denver, CO, as it can attract or detract potential renters. With the proper knowledge, you can make better decisions in your search for rental applicants.
If you want to earn like a landlord but don't have time to manage everything yourself, consider partnering with PMI Aspire, our full-service property management company. Our president, Peter Jakel, is a Colorado native and licensed employing broker. Peter has over a dozen years of experience in real estate property management, which he'll use to help make managing your rental property manageable.
Reach out to us today! We'll happily answer your questions and provide a free property analysis!
