How do you explain an Administration Fee to a prospect?

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6 years 6 months ago #20427 by Brandon Bryson
How do you explain an Administration Fee to a prospect? (not an application fee FYI)
6 years 6 months ago #20427 by Brandon Bryson
Colby Cartwright
6 years 6 months ago #20428 by Colby Cartwright
Replied by Colby Cartwright on topic How do you explain an Administration Fee to a prospect?
we call ours a reservation fee. once you have been approved in order to reserve one of our beautiful apartment homes you will pay a reservation fee of $200 which reserves the apartment home, prepares your welcome home letter including the processing of your lease agreement.
6 years 6 months ago #20428 by Colby Cartwright
Connie Mathes
6 years 6 months ago #20429 by Connie Mathes
Does it go towards deposit or is it a true fee?
6 years 6 months ago #20429 by Connie Mathes
Colby Cartwright
6 years 6 months ago #20430 by Colby Cartwright
Replied by Colby Cartwright on topic How do you explain an Administration Fee to a prospect?
Connie Mathes it’s a true fee. we collected over $5k in the month of May in the reservation fee. we have no issue with it. we also started collecting a one time utility setup fee to offset the admin fees that the water billing company charges and we collected over $2k in May but it’s not due until move in.
6 years 6 months ago #20430 by Colby Cartwright
Contessa Wilkes
6 years 6 months ago #20431 by Contessa Wilkes
Replied by Contessa Wilkes on topic How do you explain an Administration Fee to a prospect?
It is for the administrative work that goes into the application process such as the employment and rental verifications that are completed as well as the lease preparation.
6 years 6 months ago #20431 by Contessa Wilkes
Tricia Wright Grimstead
6 years 6 months ago #20432 by Tricia Wright Grimstead
Replied by Tricia Wright Grimstead on topic How do you explain an Administration Fee to a prospect?
Ok so if you use that verbiage for an admin fee, what do you say about an application fee
6 years 6 months ago #20432 by Tricia Wright Grimstead
Contessa Wilkes
6 years 6 months ago #20433 by Contessa Wilkes
Replied by Contessa Wilkes on topic How do you explain an Administration Fee to a prospect?
The application fee covers the credit and background checks
6 years 6 months ago #20433 by Contessa Wilkes
Anthony T Petrone
6 years 6 months ago #20434 by Anthony T Petrone
Replied by Anthony T Petrone on topic How do you explain an Administration Fee to a prospect?
I have always thought that properties should do away with admin fees. Nickle and dimeing new residents is a shame. Just raise the monthly rent by $10 if you need to have an admin fee! OR, raise the application fee to cover any "expense".
6 years 6 months ago #20434 by Anthony T Petrone
Ana Funsch
6 years 6 months ago #20435 by Ana Funsch
I agree. It can be a big turn off the more “extra” costs you have to explain. That’s why I don’t like having to explain that water, sewer and trash fee is added on to rent. Some people interpret it as being misleading when they are told it’s included
6 years 6 months ago #20435 by Ana Funsch
Jaren Sutton
6 years 6 months ago #20436 by Jaren Sutton
Our jobs are to increase the bottom line. If your competitors are NOT charging admin fees and this is preventing you from renting, then talk to your supervisor. Otherwise, our job is to increase NOI.
6 years 6 months ago #20436 by Jaren Sutton
Anthony T Petrone
6 years 6 months ago #20437 by Anthony T Petrone
Replied by Anthony T Petrone on topic How do you explain an Administration Fee to a prospect?
Jaren Sutton A short term increase in NOI doesn't help much if you get a reputation for charging lots of little fees and people avoid your property. Same holds true for those charging $1 per nail hole on a move out. They think they are doing right by the owner but all they are doing is kicking a tenant on the way out who will go tell everyone not to live at your property. LOTS of other ways to increase NOI!
6 years 6 months ago #20437 by Anthony T Petrone
Jon E Directo
6 years 6 months ago #20438 by Jon E Directo
I disagree our job is to provide service (exceptional) and through that increase NOI. If your property has a stellar reputation I can guarantee you can increase your rents much more so than ancillary income sources.

In all my years as a property manager I’ve had huge successes with NOI and not having the best other income sources. But I can tell you my properties have always had the best reviews in their market.

There will come a time when you maximize your NOI through these fees and it will result in less revenue because you’ve nickel and dimed.
6 years 6 months ago #20438 by Jon E Directo
Britni Michelle Ruiz
6 years 6 months ago #20439 by Britni Michelle Ruiz
Replied by Britni Michelle Ruiz on topic How do you explain an Administration Fee to a prospect?
I always go with the admin fee goes to the city (it really mostly does), it covers the occupancy permit upkeep/inspection and pays for crime free drug free housing. In our area they charge a lot per door for that, we do obviously make some profit. I also know our admin is right on par or a little less than our comps. See how yours compares, easier to explain when it is everywhere and right on par.
6 years 6 months ago #20439 by Britni Michelle Ruiz
Scott Brandt
6 years 6 months ago #20440 by Scott Brandt
That sounds deceptive. Why not have a ‘owner mortgage fee’ and a ‘property tax fee’ as well because those dollars also go somewhere else? That way you can advertise an incredibly low monthly rate.
6 years 6 months ago #20440 by Scott Brandt
Britni Michelle Ruiz
6 years 6 months ago #20441 by Britni Michelle Ruiz
Replied by Britni Michelle Ruiz on topic How do you explain an Administration Fee to a prospect?
It's not though and it isnt deceptive. That fee covers the occupancy permit that every property is required to have and if the resident were to have to do that it would be more costly and take more time. They also have the knowledge that we have Crime Free Drug Free Housing and what all falls in that. It is expensive, but a neighborhood doesnt have it as a "perk". In our prospect folder we have every fee and deposit laid out. Nothing is hidden and every and all questions are answered open and honestly. There is no way we could operate at an "incredibly low monthly rate" by adding on just 1 time fees. I have read comments and honestly I don't understand the hate for the admin fee. While yes we are providing a home it is also still a business. There are fees. There is a join fee when get a gym membership, there's admin fee/usage fee/etc on just about every bill you get. Rather than add that amount to the rent having it an upfront fee and what it goes to makes more sense and honestly I have had no issues explaining it and no one has had a problem with it.
6 years 6 months ago #20441 by Britni Michelle Ruiz
Joy Nolan-Massey
6 years 6 months ago #20442 by Joy Nolan-Massey
Replied by Joy Nolan-Massey on topic How do you explain an Administration Fee to a prospect?
Wouldn't labeling something as "crime free" especially if you're saying a fee covers it, put the property at liability if something happens? Not trying to be argumentative, but genuinely would like to know what you have done to ensure a crime free home.
6 years 6 months ago #20442 by Joy Nolan-Massey
Britni Michelle Ruiz
6 years 6 months ago #20443 by Britni Michelle Ruiz
Replied by Britni Michelle Ruiz on topic How do you explain an Administration Fee to a prospect?
The Crime Free Drug Free program is something we are required as multi family housing to participate in with our city. It allows us to have a 3 strike policy, we get a copy of the police report anytime they come out, they do random sweeps of property to make sure cars aren't derelict our have expired tags and will "ticket" cars with reminders if they leave valuables in their car to not do so, they also respond VERY QUICKLY to calls on property, if there is an issue on property or around town they will up the patrols they do.
6 years 6 months ago #20443 by Britni Michelle Ruiz
Anonymous
6 years 6 months ago #20444 by Anonymous
Some huge lawsuits over "admin fees" brewing around the US.
6 years 6 months ago #20444 by Anonymous
Rachel Nicole Kritner
6 years 6 months ago #20445 by Rachel Nicole Kritner
Replied by Rachel Nicole Kritner on topic How do you explain an Administration Fee to a prospect?
It’s to hold the apartment then covers the cost of the legally prepared documents.
6 years 6 months ago #20445 by Rachel Nicole Kritner
Barbi Ann
6 years 6 months ago #20446 by Barbi Ann
I let them know it is for the prep of legal documents just like doc fees when you buy a car
6 years 6 months ago #20446 by Barbi Ann
Anonymous
6 years 6 months ago #20447 by Anonymous
The app fee covers cost of applications, forms and membership to the apartment association. Admin fee covers any costs associsted with processing and screening.
6 years 6 months ago #20447 by Anonymous
Scott Brandt
6 years 6 months ago #20448 by Scott Brandt
Extra fees are just a way to deceive the renter into starting the leasing process by advertising a lower per month rate. If you’re trying to cover the costs of the application process, call it an application fee. If you’re adding on an admin fee, a trash and water or sewer fee, or a security fee, that’s just deceptive advertising of the true monthly rate up front. It’s no better than the cable company charging a ‘local broadcast fee’ and a ‘regional sports fee’ after you’ve already been drawn in by the $49.95 per month advertised rate.
6 years 6 months ago #20448 by Scott Brandt
Jaren Sutton
6 years 6 months ago #20449 by Jaren Sutton
Scott, these are one-time up front fees. Unless you are excluding these fees when quoting move in fees, it is not deceptive. Do you not quote the security deposit and app fees? When someone asks "What is your security deposit?" It should always be answered with the app fee, admin fee and required deposits.
6 years 6 months ago #20449 by Jaren Sutton
Jane McClure Ravel
6 years 6 months ago #20450 by Jane McClure Ravel
Replied by Jane McClure Ravel on topic How do you explain an Administration Fee to a prospect?
Just tell them it's extra income for the property/owner. Joking... Don't ever say that
6 years 6 months ago #20450 by Jane McClure Ravel
Tifani Lee
6 years 6 months ago #20451 by Tifani Lee
If you can’t explain why you’re charging it then.....WHY are you charging it?
6 years 6 months ago #20451 by Tifani Lee
Ronny Deann Stephens
6 years 6 months ago #20452 by Ronny Deann Stephens
Replied by Ronny Deann Stephens on topic How do you explain an Administration Fee to a prospect?
This has been a topic in my office. And you hit the nail right on the head. if you can't explain it, you cannot charge it! unless you like lawsuits...then charge all you want with no explanation or actual need for the fee.
6 years 6 months ago #20452 by Ronny Deann Stephens
Wes Daniel
6 years 6 months ago #20453 by Wes Daniel
In my daily life, I *despise* add on fees. I don't fly Spirit Airlines ever because I don't know how much I'm going to end up paying for the flight after all of the fees. I fly Southwest whenever I can because I know what I'm going to pay when I book. I don't bank with banks because of all their extra fees and charges - I bank with credit unions. The last several years I rented, I refused to rent from property management companies because of all the extra fees and charges - I rented from private owners. To me, there's no way to explain it because it's nothing but added profit and should just be called as such.
6 years 6 months ago #20453 by Wes Daniel
Genea Cone Closs
6 years 6 months ago #20454 by Genea Cone Closs
Replied by Genea Cone Closs on topic How do you explain an Administration Fee to a prospect?
An application fee covers the costs the company incurs from other agencies to pull credit and background checks. The Administrative Fee covers the cost of the office staff needed to input the data into the credit bureau/3rd party reference check systems and then prepare any other documentation required to have a contract ready for the new resident to sign. In government contracting, they call that a G&A burden on top of a direct cost.
6 years 6 months ago #20454 by Genea Cone Closs
Connie Mathes
6 years 6 months ago #20455 by Connie Mathes
I hear you but conceptually isn't the cost of the staff processing the fee the cost of doing business? It's a hard sell for me except that all the competition does it.
6 years 6 months ago #20455 by Connie Mathes
Genea Cone Closs
6 years 6 months ago #20456 by Genea Cone Closs
Replied by Genea Cone Closs on topic How do you explain an Administration Fee to a prospect?
Connie Mathes I can see your point, however, I have been doing pricing for commercial and government contracts for the last few years and the cost of doing business is buried in either the gross profit margin (commercial contract) or G&A plus overhead and then add on profit (government contracts). It made me look at the back side of business differently.
Now the less technical way is to compare it to TicketMaster, I mean $18+ in fees per ticket. Maybe we should ask them to explain their fees, cause we all pay them!
6 years 6 months ago #20456 by Genea Cone Closs
Coletta Charmane Washington
6 years 6 months ago #20457 by Coletta Charmane Washington
Replied by Coletta Charmane Washington on topic How do you explain an Administration Fee to a prospect?
Hi
6 years 6 months ago #20457 by Coletta Charmane Washington
Jessica Stroud Otwell
6 years 6 months ago #20458 by Jessica Stroud Otwell
Replied by Jessica Stroud Otwell on topic How do you explain an Administration Fee to a prospect?
To offset the cost of holding the unit offline while we process the application.
6 years 6 months ago #20458 by Jessica Stroud Otwell
Betsy Magner
6 years 6 months ago #20459 by Betsy Magner
If asked, that’s usually what I say, too. I let them know that it’s pretty rare to have someone move in on the actual day an apartment is ready and it helps make up for occupancy loss during the process. Never had any kick back from a prospect or applicant with offering a forthcoming and honest answer
6 years 6 months ago #20459 by Betsy Magner
Coletta Charmane Washington
6 years 6 months ago #20460 by Coletta Charmane Washington
Replied by Coletta Charmane Washington on topic How do you explain an Administration Fee to a prospect?
Ahhhhh, the holy grail of answers...I have been trying to master this response for 7 years...i am bowing
6 years 6 months ago #20460 by Coletta Charmane Washington
Anthony T Petrone
6 years 6 months ago #20461 by Anthony T Petrone
Replied by Anthony T Petrone on topic How do you explain an Administration Fee to a prospect?
Think long term, little fees are thinking about the short term! Property reputation and word of mouth is more important then little fees we may charge a new resident or one on the way out.
6 years 6 months ago #20461 by Anthony T Petrone
Dee Neuman
6 years 6 months ago #20462 by Dee Neuman
Reservation fee
6 years 6 months ago #20462 by Dee Neuman
Sarah Thompson
6 years 6 months ago #20463 by Sarah Thompson
Replied by Sarah Thompson on topic How do you explain an Administration Fee to a prospect?
Covers lease paperwork and keys.
6 years 6 months ago #20463 by Sarah Thompson
Rachel Lynette Payton
6 years 6 months ago #20464 by Rachel Lynette Payton
Replied by Rachel Lynette Payton on topic How do you explain an Administration Fee to a prospect?
We’re legally not allowed to charge them in Oregon, but I’d probably up my app fee to the max allowed, or at least whatever the app+admin fee is. And eliminate the admin fee. No more explaining, problem solved.
6 years 6 months ago #20464 by Rachel Lynette Payton
Anonymous
6 years 6 months ago #20465 by Anonymous
I'm in Texas. We can still charge them although some may disagree. I tried it the way you mentioned and got more backlash this way. When I told people our app fee is $125 they threw a fit!
6 years 6 months ago #20465 by Anonymous
Shayne Will
6 years 6 months ago #20466 by Shayne Will
I tell prospects that it covers the cost of the lic. fee for the lease and all of the paperwork.
6 years 6 months ago #20466 by Shayne Will
Colin R. Ferguson
6 years 6 months ago #20467 by Colin R. Ferguson
Replied by Colin R. Ferguson on topic How do you explain an Administration Fee to a prospect?
It is a way to scare off applicants who are not qualified.
6 years 6 months ago #20467 by Colin R. Ferguson
Coletta Charmane Washington
6 years 6 months ago #20468 by Coletta Charmane Washington
Replied by Coletta Charmane Washington on topic How do you explain an Administration Fee to a prospect?
Ha...doesn’t work on properties where it’s refundable if app is declined...pain in the @#$ getting two money orders for applications...i do my best to pre-screen when I was on those properties but you still get the idiots who think they’re smarter than the CoreLogic
6 years 6 months ago #20468 by Coletta Charmane Washington
Anonymous
6 years 6 months ago #20469 by Anonymous
If you advertise a rent price, then tell someone when they come to look at the place or when they start the paperwork that you are charging an admin fee, you just committed an unfair and deceptive trade practice. It would be like Best Buy advertising a TV for $1000 and when you go to pay, they hit you with a fee or force you to buy a warranty. The class actions already hit the hotels for the undisclosed resort fees which is why they are all disclosed now at the time of reservation and in the fine print of the quoted prices. Someday your luck will run out!
6 years 6 months ago #20469 by Anonymous
Amanda Bishop Porche
6 years 6 months ago #20470 by Amanda Bishop Porche
Replied by Amanda Bishop Porche on topic How do you explain an Administration Fee to a prospect?
We eliminated the admin and increased the app fee. Success!
6 years 6 months ago #20470 by Amanda Bishop Porche
Kathy Gifford Vance
6 years 6 months ago #20471 by Kathy Gifford Vance
Replied by Kathy Gifford Vance on topic How do you explain an Administration Fee to a prospect?
What does your company say that fee covers?
6 years 6 months ago #20471 by Kathy Gifford Vance
Tricia Wright Grimstead
6 years 6 months ago #20472 by Tricia Wright Grimstead
Replied by Tricia Wright Grimstead on topic How do you explain an Administration Fee to a prospect?
We started just charging a reservation fee of $150 and just put it towards the first month’s rent when approved. We also charge an application fee $35.
6 years 6 months ago #20472 by Tricia Wright Grimstead
Melissa Bridges
6 years 6 months ago #20473 by Melissa Bridges
Replied by Melissa Bridges on topic How do you explain an Administration Fee to a prospect?
Admin fees have always been BS! They know it but more importantly... We know it! Up the app fee and do away with "admin fees"! It's our job to process the app... Get the rental and employment verification, do the paperwork blah blah... It's what we do!
6 years 6 months ago #20473 by Melissa Bridges
Julie Still
6 years 6 months ago #20474 by Julie Still
Ask your owners to be "fee-free" and distinguish your community from the competition - it's a great selling feature, and you can make it up in rent if you price your product correctly.
6 years 6 months ago #20474 by Julie Still