Out of 15,804 housing units, 47% are occupied by renters in Lynnwood, Washington. Lynnwood has a huge renter's market so it's a great place to invest in real estate.
Landlords can safeguard their investments with tenant screening. This process can be costly if you pay for it out of pocket. Instead, have applicants pay for it with their rental application fee.
How much is a typical application fee? Keep reading to find out.
The Cost of Application Fees
Application fees in Washington State are used to cover tenant screening. Landlords can only change the exact amount by law.
In the application, provide a written notice detailing what information you are looking for during the screening process. You must get signed consent from the applicant before you can screen them.
Application fees are non-refundable but landlords don't profit from them. This means you don't have to report application fees as rental income on your tax return at the end of the year.
Depending on the service you use, application fees may cost up to $75. Keep receipts in case of disputes with applicants. You cannot charge more than the exact amount for tenant screening as an application fee.
How to Use Application Fees
After receiving consent on the rental application to screen someone, collect their funds for processing.
There are different ways to go about tenant screening. It's not recommended to screen tenants yourself as it takes time and an expert eye. Instead, pay for a tenant screening service or hire a property manager who will.
The best tenant screening company will offer the following services:
- Criminal history check
- Credit check
- Employment verification
- Rental/eviction history
Landlords use tenant screening information to find tenants who can pay rent on time. A property management company will use your criteria to select the best tenants.
Tenant Screening Laws
There are laws in place regarding tenant screening that landlords must follow in Washington. Applicants don't have to provide you with the application fee until you disclose what information will be accessed during the check.
You must also state your requirements and what could lead to denial. Since application fees are non-refundable, applicants might decide not to pay the amount.
This is a good way to weed out unserious applicants. Applicants who pay the fee and provide their information know that they are likely to be accepted based on your requirements.
The last thing you should offer applicants is the contact information for the tenant screening service you use. Applicants can dispute a report if they are denied so it's important to provide them with a copy of your findings.
How Can a Property Management Company Help?
Typical application fees vary by state. In Washington, landlords can only charge the exact amount of the tenant screening price.
A property management company in Lynnwood can collect applications and screen tenants on your behalf. PMI Brewder Realty has a screening process that includes thorough credit and background checks.
We have years of experience finding the right tenant, not just the quickest one. Contact us today for help filling your vacancies and more.
