My method of investing was actual investing. I was implementing the “buy and hold” strategy, where I would buy, renovate and rent single family homes. This post is specifically for landlords in the same situation. I’d like to tell you to assist me in my goal of doing away with application fees, or at least putting a leash on what I’ll call the “app fee scam”. When you hire a third party property management company, it is common knowledge that they screen your tenants to gauge the likelihood of ability to pay rent, right? This can be done through a myriad of different techniques, one of which is an “application”. Well, this is fine and dandy, for screening of employment, and so on, but what’s gotten out of hand is the collection of fees (typically $30) for the potential tenants submission of this application. I hired many property management companies looking for “the one”. Never found it. The market is ruined and morality is ruined. What consistently happened? They collected more in application fees than they did for the entire year in management commissions. As I was on top of my business, they were fired and replaced. They were replaced by the next company that would “never” do such a thing, but alas, it happened again. It’s kind of a catch 22…how to screen the tenants properly without risking longer than acceptable vacancies and high costs associated with that. LANDLORDS….watch out for this and PLEASE contribute to this post to help end this deadly plague….
Aug 182009
Greatings, Where are you from? Is it a secret?
Charlie
From the East Coast, did some business in Cali.. then back to New England, with some bits and pieces in between. I also work in International markets. Its not a secret… I just need to make sure I am not too specific of course, but I do need to be sure to let people know I have a diverse view on the real estate market as a whole.
Its all too common now, and its not just the property management firms who do that type of “business”, also Landlords themselves do it. It is simply an easy way to make money and yet not have to rent out a thing…
To whom is concerned about this: IF you pay for an application, and you are denied, request a copy of the background check etc. IF the landlord or the property management does not give you a copy, you will get (in the end) your money back!
It makes me personally sick how people, firms, landlords take advantage of other people in such a low manner. Its called greed though and that with no risk at all….since lots of tenants do not know their rights.
I personally recorded a visitation of a place in WA on video and paid the application fee…with a perfect credit history and no criminal background at all…and yet did not “qualify”. When I requested then a copy, he said he did it online and did not print it out…and so my lawyer has now a fieldday!