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3 Things to Know About Application Fees

Application fees are fees charged by property owners to potential tenants of a rental home or apartment. The fees are charged at the time of application and do not guarantee tenancy will be granted and are oftentimes non-refundable.

Here are three things you need to know about application fees.

1. They aren’t found at all apartments

Application fees aren’t necessarily “uncommon,” but they won’t be found at every single apartment complex you tour. If you tour an apartment that does require an application fee, it will most likely be clearly stated in the listing.

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2. Application fees exist for a reason

You might be thinking that application fees seem like a sort of scam. They usually aren’t. Application fees are oftentimes used to cover fees incurred by the property owner when vetting potential tenants.

Background checks, criminal history checks and other vetting procedures are often costly. If an apartment is in extremely high demand, this can result in substantial costs to the property owner, even if none of the vetted tenants actually rent a unit.

3. Application fees may indicate a more desirable market

Because application fees are so commonly used to offset the cost of screening potential tenants, they can be representative of a unit or area that’s in high demand. This is why application fees are found much more commonly in extremely competitive rental markets like New York, Los Angeles or Chicago.

To pay an application fee, or not

No matter where you live, you likely aren’t obligated to rent an apartment or house that has an associated application fee. Chances are, you can find a rental without one.

However, if you’re looking for a very specific apartment or searching in a highly-desirable neighborhood, paying an application fee could put you at better odds of landing your dream spot.

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