Heads up, Boulder landlords: overcharging for rental application fees could get you into legal trouble! It's not about squeezing every dime out of your potential tenants; it's about following the local laws and ordinances that dictate how much you can charge for application fees in Boulder, Colorado.
The last thing you want is a legal hiccup derailing your tenant placement efforts, are we right? Well, if so, stick around, and I'll walk you through the ins and outs of rental application fees, so you won't get caught in a legal snare.
What Rental Application Fees Cover
If you're new to property management, you might be wondering why application fees are even a thing. Simply put, these fees cover the costs of running background and credit checks, and sometimes even cover administrative expenses.
You're not just pocketing this money! It's essentially a way to screen for serious applicants.
The Legal Landscape
Hey, before you set that fee to an astronomical amount, know that Boulder has specific laws concerning how much you can charge.
Laws can change, but as of now, you're generally allowed to charge no more than $50, give or take. Anything beyond that, and you're cruising for a legal bruising.
Tenant Placement: Timing and Transparency
Application fees are usually due when the application is submitted. If you want some landlord advice, be upfront about these fees.
When potential tenants know about the application fees in advance, you lessen the risk of drop-outs. Essentially it makes the whole tenant placement process smoother.
To Refund or Not To Refund
One of the questions that pop up often is whether you should refund the application fee if you reject a tenant. The answer is often no, but you have to be transparent about this from the get-go.
If tenants know that the fee is non-refundable, they're more likely to only apply if they're genuinely interested in your rental property.
Boosting Your Rental Income
Did you know that setting a reasonable application fee can actually help you secure better tenants, and in turn, increase your rental income? That's right; a fair application fee encourages serious applicants, reducing the likelihood of vacant months and frequent tenant turnovers.
You get quality tenants. We're talking about tenants who can contribute positively to your rental income!
Keep Track of All Fees
One golden nugget of property management wisdom: keep meticulous records of all application fees. Why? In case a rejected applicant challenges you, you'll need those records to prove that you used the fee for its intended purpose.
Remember that charging an exorbitant fee isn't just a bad look; it's a legal no-no. Being unaware of the law is no defense. If a prospective tenant feels they were unjustly charged, they could take you to court, causing not just a financial strain but also a smudge on your property management reputation.
Navigating Rental Application Fees
So now you're clued in on rental application fees, so you can manage your Boulder rental property like a pro. You know what they cover, the legal restrictions, and how setting the right fee can even boost your rental income.
If you want to take things a step further with professional property management, then contact us at PMI Coal Creek.
