Lease origination fee?
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Lease origination fee? (by NE [PA]) May 31, 2018 2:31 PM
       Lease origination fee? (by Opinionated [NC]) May 31, 2018 3:13 PM
       Lease origination fee? (by GKARL [PA]) May 31, 2018 3:17 PM
       Lease origination fee? (by NE [PA]) May 31, 2018 3:22 PM
       Lease origination fee? (by NE [PA]) May 31, 2018 3:47 PM
       Lease origination fee? (by rentON [PA]) May 31, 2018 4:22 PM
       Lease origination fee? (by Sisco [MO]) May 31, 2018 4:30 PM
       Lease origination fee? (by Ken [NY]) May 31, 2018 4:47 PM
       Lease origination fee? (by S i d [MO]) May 31, 2018 7:18 PM
       Lease origination fee? (by JB [OR]) May 31, 2018 11:13 PM
       Lease origination fee? (by Tim [IN]) Jun 1, 2018 4:23 AM
       Lease origination fee? (by Jeffrey [VA]) Jun 1, 2018 6:03 AM
       Lease origination fee? (by JB [OR]) Jun 1, 2018 10:49 AM
       Lease origination fee? (by orit [MI]) Jun 6, 2018 12:45 PM
       Lease origination fee? (by JamesC [MA]) Jun 6, 2018 4:00 PM
       Lease origination fee? (by Dee [AZ]) Jun 6, 2018 8:58 PM
       Lease origination fee? (by mike [CA]) Jun 10, 2018 3:34 PM
       Lease origination fee? (by Jimbo [KY]) Jun 11, 2018 7:59 AM
       Lease origination fee? (by Dee [AZ]) Jun 11, 2018 9:15 AM
       Lease origination fee? (by Jeffrey [VA]) Jun 11, 2018 12:48 PM
       Lease origination fee? (by Dee [AZ]) Jun 11, 2018 2:02 PM
       Lease origination fee? (by Dee [AZ]) Jun 11, 2018 2:08 PM
       Lease origination fee? (by razorback_tim [AR]) Jun 11, 2018 2:47 PM
       Lease origination fee? (by Pmh [TX]) Jun 12, 2018 2:51 PM
       Lease origination fee? (by Pmh [TX]) Jun 12, 2018 3:03 PM
       Lease origination fee? (by BRAD 20,000 [IN]) Jun 14, 2018 11:43 AM
       Lease origination fee? (by BRAD 20,000 [IN]) Jun 14, 2018 9:43 PM
       Lease origination fee? (by Honey [LA]) Jun 18, 2018 9:47 AM

Lease origination fee? (by NE [PA]) Posted on: May 31, 2018 2:31 PM

How much money have I lost??

I've heard about the lease origination fee a little bit, but never gave it much mind until this last convention and it actually made it to my to-do list.

I threw it out there today through text when someone was asking about the total to move in. I told them the security and deposit and the $100 lease origination fee.

He asked me through text about 1/2 hr later why the fee was so high and that he's never had one that high.

Ok. 2 things.

One, the first feedback came that it was too high. 2, HE'S HAD THEM BEFORE!!!

So my dumpiest unit has an interested party that has HAD origination fees in the past on apartments and just thought mine was high.

Ok, fair enough. I'll drop them a bit in the future, but they're on the menu to stay!

Lease origination fee? (by Opinionated [NC]) Posted on: May 31, 2018 3:13 PM

Retired landlord here, was a tenant long ago. So you want me to pay a fee to you in order to arrange to pay you more regularly in the future to live in your property?

I suspect that some of the best prospective tenants will decline-- to put it mildly.

Lease origination fee? (by GKARL [PA]) Posted on: May 31, 2018 3:17 PM

Split the upfront money between the refundable SD and the origination/move in fee. I'm thinking of doing away with the SD altogether.

Lease origination fee? (by NE [PA]) Posted on: May 31, 2018 3:22 PM

This was a test run for sure. Other folks are doing it and this person applying has seen it before.

Actually, my tenant screening service does it to me. Annual "membership" fee. Not much different.

I'm sure credit cards do it too.

One of my banks does it monthly. $2 a month for the "privilege" of having an account there.

My accountant has a $100 per year "ask my accountant" fee.

Lease origination fee? (by NE [PA]) Posted on: May 31, 2018 3:47 PM

Let's not forget mortgage/loan origination fees! Cha-Ching! Most of us have paid those babies.

Lease origination fee? (by rentON [PA]) Posted on: May 31, 2018 4:22 PM

Good luck with that new fee and let us know how it works out. My market is too tight right now to try a new fee implementation. --67.165.xx.xx

Lease origination fee? (by Sisco [MO]) Posted on: May 31, 2018 4:30 PM

My hunch is that nearly all fees in the house rental biz started with property management companies. As I see it, the property owners would not get a cut of application fees, document fees, etc. from the property management company.

If this is the norm with property management companies in your area, you may as well match. People won’t pay more for the one price all inclusive deal.

Lease origination fee? (by Ken [NY]) Posted on: May 31, 2018 4:47 PM

I am more interested in a decent tenant who will stay,sometimes I think you guys are going to be cutting your own throats with all the fees

Lease origination fee? (by S i d [MO]) Posted on: May 31, 2018 7:18 PM

The proliferation of rental fees seems to match the proliferation of legislation to restrict land lord's rights to conduct business and fees charged by Govt entities who circumvent the process of legislating taxes. If the market will bear it, charge it!

Lease origination fee? (by JB [OR]) Posted on: May 31, 2018 11:13 PM

Couple of things: As a conscientious consumer, I go out of my way to not do business with companies and organizations who I feel are just squeezing me for every nickel.

I bank at a credit union to avoid checking and other fees.

I fly Southwest to avoid checked baggage fees. I shop at the dollar store to purchase whatever I might need when possible. And on it goes.

You may get the tenants who are poor shoppers. You may get the tenants who're too lazy to look elsewhere. Maybe you get the tenants with more money than sense. You might get the tenants who will crash and burn when the crap hits the fan.

But then again, maybe that's what separates me (and you) from some of our tenants. Something to ponder!

Lease origination fee? (by Tim [IN]) Posted on: Jun 1, 2018 4:23 AM

Charge the $100. Been doing it for years now. Probably have collected 5k over the last 5 yrs. No push back. They love the early lease termination option. Need to sell your lease like a cell phone contract. They can relate then. Cell phone company charges $45 to activate a $600 phone, your $100 for a $40k home. Cheap in comparison!

Lease origination fee? (by Jeffrey [VA]) Posted on: Jun 1, 2018 6:03 AM

I will continue to encourage landlords to get out of their own little "do-it-all-youself" landlording world and visit apartment communities or even professional property management companies who manage single family rentals in your area.

Go and actually witness their leasing process and the fees they charge. If you take time to do this one simple exercise, many of you will be utterly amazed at the amount of additional money they collect as simply standard operating procedure.

Am I saying you need to charge all the same fees. Not necessarily, but at least know what your competition is charging and then intelligently consider your options. That's just smart business; instead of simply saying in theory how "you" would respond. Stop looking at things only through your limited landlord lenses and truly see what others are doing and how their customers respond.

Good for you NE, for keeping your mind (and notebook) open to new ideas. And most importantly for applying and "integrating" the idea into your menu (your system).

Lease origination fee? (by JB [OR]) Posted on: Jun 1, 2018 10:49 AM

We have a prohibition to charging a fee to enter a rental agreement in the state of Oregon. Better check your own state's statutes before implementation.

Lease origination fee? (by orit [MI]) Posted on: Jun 6, 2018 12:45 PM

taking 200-250 cleaning fee on top of SD. When adding another person to lease after lease was singed - one time $100.00 fee

Lease origination fee? (by JamesC [MA]) Posted on: Jun 6, 2018 4:00 PM

As soon as I read the subject line with "Lease Origination Fee" in the Newsletter, alarm bells went off.

See, here in the tenant-is-always-right state of Massachusetts, it's illegal to charge anything except a change of lock fee (and we even pass on that because of the potential of the below).

There's a consumer protection law in MA (MGL 93A) and predatory law firms within the Commonwealth who commonly troll the housing courts looking for violators. That law allows a lawsuit for triple damages PLUS all applicable attorney's fees.

Let's say unsuspecting Mr. & Mrs. Momanpop have 10 apartments and read your little article. Over the course of 5 years, they have 20 families move in and out. Also, lets say over 100 apply with the same paperwork stating the same lease origination fee. That's a total potential class of 120 people at, say $50 each (even if they never paid it, it's still considered damages--we've been down this road. Just saying you may charge something illegal is considered a violation.) That totals $150 per person X 120 people.

But wait, there's more! That's actually a drop in the bucket. In the meantime, Duey, Cheetum, and How, the class's law firm, are racking up 200 hours of legwork trying to track all of these people down, file motions, discovery, yada yada yada. Let's say they charge a modest $250/hr. OUCH!

I would always encourage other's to run any proposed fees by your lawyer. In the above example, those lawyer's fees upfront is cheap insurance. For further reading:

Lease origination fee? (by Dee [AZ]) Posted on: Jun 6, 2018 8:58 PM

I learned about apartment managements charging these bogus fees called "Origination" or "Administrative fee" and I discovered from the Arizona Tenants Advocates & Association this is an illegal fee to charge a renter and can be cause to legally break the lease. This is the cost of doing business and tax deductible. If you have a management co, you pay them for this service already. Come on you got to know this is not right. The only thing you can charge is the fees you incur on behalf of the tenant for tenant screening and then a refundable security deposit (limits on how much), pet deposit, for extras amenities not included like W/D, WIFI etc included utilities. But redecoration nada! You charge the tenant for all that stuff based upon move out condition minus reasonable wear & tear (which includes how long they rented for). The laws are straight forward and generally favor tenants from being taken advantage of in the housing market so don't add more fuel to an already very regulated industry.

Lease origination fee? (by mike [CA]) Posted on: Jun 10, 2018 3:34 PM

nickel and diming them makes them happy to poke back.

screening and prepping leases is a part of the cashing their checks and growing our wealth. tenants are not sheep to be shorn...they are for buying our real estate. good ones are treated like the wool bearers they are...bad ones get tossed and left to other poor landies

Lease origination fee? (by Jimbo [KY]) Posted on: Jun 11, 2018 7:59 AM

My son applied for an apartment in a complex in Michigan. They charged $25 a month to have an accent wall painted a different color. They only painted the wall one time but charged a monthly fee. They had another charge per month for updated lighting. It is what the market will bear.


Lease origination fee? (by Dee [AZ]) Posted on: Jun 11, 2018 9:15 AM

Jimbo, that's awful and what gives landlords a bad name. I would not agree to pay that in the form of add'l rent, that has to be illegal. I've seen a monthly fee for putting in a w/d or microwave (extra appliances) which has been acceptable. If the lighting was a ceiling fan, I've heard that one too. It's away to charge higher rent that's all for more amenities. But not paint. I don't care for the practice but I do think tenants should have to share or pay for repairs to appliances incurred from their use. I personally don't like supplying appliances except for the very basic stove and dishwasher. I don't think supplying housing means taking care of all their family living maintenance either.

Lease origination fee? (by Jeffrey [VA]) Posted on: Jun 11, 2018 12:48 PM

Dee, charging additional or increasing the rental basis for customized amenities in most cases is by no means illegal. Having an accent wall painted is simply another amenity choice as is adding a microwave oven or a ceiling fan. Offering customized home rental packages is something that I've encouraged rental owners to do for many years, because when offered as positive options, can actually improve the reputation of the rental owner. Doing so can even give landlords a competitive advantage over the competition and have residents desiring to stay in your properties longer

Lease origination fee? (by Dee [AZ]) Posted on: Jun 11, 2018 2:02 PM

Charging extra monthly rent for painting a wall by god is just plain wrong and not a customized amenity no nada no way no how. I might agree to a one time charge or fee but not an ongoing rent charge for a painted wall. This is not the same as adding a W/D or Fireplace which are amenities, as always it's just taken to far. I know an extended stay that tries (I said tries) to offer a studio with cheap composition wood floors and charge extra rental fee for what they had to replace old worn out carpet. Disgusting practices. I understand amenities and competition, I have vacation rentals so your talking to someone well versed in this kind of practice. Keeping good tenants starts with the basics, keeping your property in clean well maintained condition, taking care of repairs promptly and fare and reasonable rents. My long term renters have been there for years and I don't jack up rents every year on them.Just one months vacancy takes months to make up with higher rents.

You obviously are a different type landlord much like the fast food industry that charges more and more and you get less and less because the immediate profits are the primary focus. I might expect the big greedy corporation to operate this way but not your independent landlord.

You reap what you see that's all I can say!

Lease origination fee? (by Dee [AZ]) Posted on: Jun 11, 2018 2:08 PM

This thread is about the charging of "admin" or "origination" fees not amenities rental fees.

Lease origination fee? (by razorback_tim [AR]) Posted on: Jun 11, 2018 2:47 PM

Does anyone have an extra copy of Dale Carnegie’s book lying around?

Lease origination fee? (by Pmh [TX]) Posted on: Jun 12, 2018 2:51 PM

i am with Dee. some here give LL a bad name. on side note also agree “origination” fee is bogus. daughter was asked to pay that at apt complex. I told her to keep looking and she did and found place where she wasn’t being ripped off. I charge $15 app fee to cover reports. have several houses and in business 25 years. All rentals are on 2 day turns because of referrals by departing renters on 2-3,year cycles...I see the forest and not the trees.....

Lease origination fee? (by Pmh [TX]) Posted on: Jun 12, 2018 3:03 PM

opinionated said it more politely than I would.

Lease origination fee? (by BRAD 20,000 [IN]) Posted on: Jun 14, 2018 11:43 AM

Interesting thread!

I think (know!) there is a dividing line at approx age 35.

Under 35 (33% of the rental market: They'll say "Normal, no big deal." They are NOT penny pinchers like most LLs. They want what they want and they want it now.

Similar to the origination fee - For our last 1000 leases we have been collecting an Non-Refundable Option Fee instead of a deposit and up to $5000 each on the nicer homes. In Indiana the law is clear that this is NOT a deposit and CAN BE non-refundable. We average 50 new leases a year which means 50 "deposits" we do not have to refund.

Side note: 2 speakers at Convention focused on this approach.

For those nay-saying this concept, look around and catch up to the times.


Lease origination fee? (by BRAD 20,000 [IN]) Posted on: Jun 14, 2018 9:43 PM

OK That might have been a too tough.

How about this: the way people spend money has changed. Even LLs are now using ACH to pay bills and accepting credit cards for rent.

CONSIDER that the CUSTOMER has also evolved, using different methods and criteria for decisions.

Better? Nicer?


PS Traditional LLing is dead. Renters have new, different mindsets.

Lease origination fee? (by Honey [LA]) Posted on: Jun 18, 2018 9:47 AM

I'm comfortable with my initial up-front charges. We have the usual non-refundable $25 Prospective Tenant Processing fee, the refundable if you obey our 12 step vacate rules Security Deposit which is equivalent to the monthly rent, and the First month's rent which must be paid for the first 30 days with a cashier's check. The second month can be prorated if necessary.

It's another fee I can't decide on and that is what I call an EARLY TERMINATION FEE.

When the time comes for someone to leave earlier, before the lease is up and they should give me 30 days notice, and of course it's always at a bad time, I want to charge them for the inconvenience. But if I were to put this in the LEASE it may encourage them to actually leave early. Yet, I don't feel I can pronounce that there is (a hidden fee) this administrative fee for their disrupting my schedule. I'd like to hear from anybody who has this "problem", too.

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