As we all know, screening tenants is part of the process of filling in a property vacancy. Most of the time, it is the landlords who screen their applicants. They can also opt to hire leasing agents to do the job for them. Some people are also looking for vacant properties to rent, and they might hire you to help them. If that is the case, screening tenants is part of that.

You probably know everything there is to look for in a tenant application, but since screening takes your time, effort, and monetary resources, should you charge the applicant? It is an added expense on their part, but there are valid reasons why you should.

Tenant screening fees will cover the cost of background checks, credit checks, and other expenses related to it. There are rules that you have to remember, though.

• State laws

Before you decide on the price for the tenant screening fee, keep in mind that you have to check your local state laws. There are states which will mandate the allowed maximum amount of a screening fee.

For example, the City of Berkley in California allows a maximum amount of $52.68 for tenant screening fees. It may differ from state to state, and you must review this. It will help you avoid any complaints from your applicants.

• Clear communication

The most important thing when asking for a screening fee is to let the applicants know what it is for. They have to know the total amount before they agree to it. Do not charge them an amount and then ask for more afterward when it falls short. You have to compute all the expenses to quote them the correct amount.

The applicants should also know why you’re asking for a screening fee. They are going to be less hesitant to pay if they know where their money is going. Inform them of the expenses related to their screening to make them understand your reasons better.

Let them know about the tenant screening fee beforehand. Do not ask after you have already spent money to conduct the process because there is a possibility that they will refuse to give you money. After all, you failed to let them know. If the applicants are serious about renting out the property, they will not have any objections to the necessary fees that come with it. You can avoid problems by making them aware of the necessary payments. It will also help you determine which applicants are truly committed to rent.

• Cash or check

When asking for the screening fee, most landlords or lease agents will ask for cash as payment. If the tenant pays cash, there is a guarantee that the expenses are covered. However, you may fail to realize that asking for cash is a missed opportunity. If you ask for a check, you can verify the applicant’s name, address, and banking information. This information can help you validate his identity.

Remember to charge each applicant the same amount for screening. I suggest that you go over the tenants one by one. The first one to pay will get screened first, and so on. Return the payments of applicants who were no longer screened because the vacancy got filled prior.

The tenant screening fee is an added expense for the applicants, and you have to make it worth their while. If they know why it is important, they will be more willing to pay for it.

It’s like when you sign up for a Padleads account. You have to pay a small amount for it, but you know it is worth the price. You can post property listings and syndicate them to other websites. You can reach a lot of renters all over the country.