Avoid These Rental Fees To Save Lots Of Money
Most rental companies charge an application fee when you apply for a rental property to cover the cost of screening a potential tenant. However, a recent report from the National Consumer Law Center found that many companies are charging fees far in excess of the cost of running a credit check. In fact, application fees were found to range as low as $25 to as high as $350 and many companies were charging every applicant, even those who wouldn't have been eligible for the apartment.
Renters that are late paying their rent are often subject to late fee clauses in their leases, but some renters are paying very high late fees that do not reflect the actual cost to the landlord of the property. The late fees typically take one of three forms: a daily charge, a flat fee and a daily charge, or a charge commensurate with a percentage of the rental amount. The flat fee is typically around $50, but the daily rates can range between $5 and $25 per day, and percentage-based fees have been seen as high as $200.
Utility Related Fees
Utility related fees are fees charged in excess of your utility payment and are typically charged by property management companies that control all or part of a property's utility billing. These fees can be reported as processing, administrative, or service fees, but explanations of just what the renter is paying for can be vague. These fees were found to range between $3 and $50 per month.
Many tenants are reporting the rise of administrative fees tacked on to what they owe in rent each month. These charges are frequently unspecified or unexplained, so tenants do not know what the fees are for and why they are separate from their rental payments. While some administrative fees are one time charges, more renters are finding themselves paying monthly administrative fees of between $10 and $25 per month.
Some landlords make it a requirement that their tenants purchase certain types of insurance while they are residents for the property. In some cases, the insurance purchased covers the interests of the landlord, not the tenant. In other cases, the landlord requires the purchase of a specific type of insurance from a designated insurance provider. If the insurance is not purchased, the tenant is subject to additional fees.
High Risk Fees
High risk fees are often charged to tenants that have adverse information on their screening report, like a criminal record, an eviction record, a low credit score, or a limited rental history. In some instances, these fees replace a security deposit while in other instances, they are charged on top of a security deposit and are non-refundable.
Pet fees are another category of fees that can vary widely between rental properties. In many cases, these fees include a flat deposit paid at the beginning of the lease as well as an additional charge added to the monthly rent. The flat deposits typically range between $200 and $500 and the monthly charge can be as high as $50. Many rental properties also place limits on the number of pets you can have and breed restrictions for what kind of dogs can be on the property.
As shelter costs continue to be a significant driver of month-to-month inflation and more renters find themselves rent burdened, it is important to know how to get the best value for the housing you inhabit. Avoiding high rental fees is just one part of getting the best rental property at the best rate. For more renting tips, take a look at our other articles related to housing and the rental market.