Fees get a bad rap. Even the mention of the word for you might harken unpleasant experiences. It’s because typically when people think of fees, they think of ones that are hidden, not concealed up front, and essentially used to dupe them into spending more money.

But not all fees are negative. Actually, they can be quite reasonable and even helpful in educating consumers on how their dollar is spent to provide the good or service. And for property managers working to build a relationship of understanding and trust with tenants, this can go a long way. Read on to learn of 7 fees you can consider as a landlord to improve your business.

1 – Application

If you are serious about your business and getting quality renters into your units, there is no better way than to establish a screening process on the front end. This adjustment can come at no cost to you when you simultaneously introduce an application fee.

While you may fear turning off prospective tenants, the installation of a fee right off the bat will ensure that only individuals who are truly serious about renting will submit an application and take up some of your precious time. It’s important to review your local legislature, as some state’s do not allow for an application fee or have strict limitations on them.

2 – Broker

If you’ve never lived in a bigger city like New York or Boston, the idea of a broker fee may be foreign to you. But in these major metropolitan areas, they are commonplace and sometimes standard operating procedure. Essentially a broker’s fee is a commission paid to real estate agents who connect landlords to prospective tenants. The onus for payment of that fee historically falls on the renter and typically ranges anywhere from 12-15% of an entire year’s rent. When you start to do the math on this, you’ll understand why this set-up has many citybirds shaking their heads and wringing their hands. If you are required to work with a broker for the first time, make sure that you are 100% aligned on the pay structure before any of the action starts.

3 – Pet

Pets cause damage. That is an undeniable fact. Even the most well-behaved of felines or fur babies will leave your unit with some form of wear and tear. But when, to some renters, the allowance of pets is a deal-breaker, many landlords can’t afford to turn the four-legged friends away. Lucky for you, there are a few ways you can build in additional costs to ensure that, no matter what the level of impact, your property value doesn’t dip.

Many landlords up front charge a pet deposit. This provides peace of mind to both parties, knowing that whatever damage might occur, there are funds already set aside to handle it. You might also consider charging a pet fee at the time of move-in. Separate from the deposit, this is essentially an admission that, like it or not, value-wise, having a pet in the space is less desirable over time than not, and the fee covers that additional depreciation. This is highly common and expected by most pet-owning renters.

4 – Move-in

A move-in fee is similar to a security deposit in that it is paid at the time of move-in; however, the purpose is quite different. While security deposits are “just in case” funds, the move-in fee is actually used right away to support the cost of initial move-in and is therefore non-refundable. You can use the money collected to do all the things that go along with setting a new renter up in your space. Anything from fresh paint on the walls, new keys for each renter, or even making updates to the building directory.

As with the application fee, you’ll want to consult your local state laws to ensure this practice is permitted and if there are any special stipulations. It is also important, for any fee, that it is clearly outlined in the leasing agreement presented to tenants from the beginning.

5 – Parking

Depending on where you live, convenient parking can be a super-hot commodity used to attract tenants. If this is important to your prospective tenants, they will be seeking it out and will have no problem with paying the additional charge. Especially if they know exactly what they are getting in return. When setting rates, it’s good to know the area. Get an understanding of what other garages and lots are charging and what someone might expect to pay elsewhere if they were to forgo your on-site option.

6 – Utilities

If you are a seasoned landlord, you likely already have a rhyme and rhythm to how you manage utility bills. However, if you are just starting out, it’s worth putting in some time and research. One option for property managers is to keep utilities under their own charge and simply tack on a fee to each month’s rent to cover those expenses. Most tenants have seen it both ways and, as long as the fee is reasonable and fully detailed in the lease, they will take no issue.

7 – Amenities

Luxury amenities like a pool, gym, or even laundry facility can be a big draw and even a deciding factor for tenants in their decision-making process. But from a property management perspective, they can also be costly to maintain. For this reason, some landlords build in an upcharge.

The Great Debate

At the end of the day, to manage a property and operate your business requires funds. The question of how you collect those funds from tenants, whether it be by additional fees or increased rent, is up to you.

It comes down to how you wish to market your property. You’ll have to strike a balance between an attractive lower rent with fees on the back end or a healthier rental payment that is appealingly all-inclusive. Whatever you decide, the most important thing is making sure you are clear and upfront with your tenants about the cost and its justification. Your tenants will be much happier with whatever the charge knowing that they aren’t being deceived. Because, as we’ve learned, there’s no worse fee than a hidden fee.