The Keys to Reasonable Tenant Fees

As a landlord, your job isn’t to make people happy. Granted, that is part of the equation, but you’re also in the business because it’s a good way to make money.

However, you can’t make money in a way that strikes your tenants as overly garish or greedy. One of the biggest mistakes you can make is charging unreasonable tenant fees. It erodes any trust your renters might have had in you, and it also makes them more likely to move out when their lease is up. Here are three ways to know if those fees you’re charging are reasonable.

Are they in line with other tenant fees in the area?


Renters know to brace themselves if the rent starts rising at other properties in their city. Once a few property manages start raising the rent, then it can reach the point where housing becomes all but unaffordable in certain cities and neighborhoods. It’s not only happening in big city markets like San Francisco and Seattle, either. In 1995, the median rent was $425 across the US. By 2017, the median asking price for rent had reached $864, according to numbers from the US Census Bureau.

Many renters are already on edge and wondering if they’ll be able to afford the next rent hike, and they’ll also be upset if the rent stays the same but tenant fees shoot up. You may think you’re doing your renters a favor by increasing the cost of parking rather than raising the rent, but that’s not always true. Are other rental properties charging $100 a month for uncovered parking? If not, take a step back and reconsider. Maybe it’s best to charge $50 a month and see how that goes before you jump immediately to $100. People tend to respond better to price increases that are gradual rather than sudden.


Is the service costing you anything?


Charging for things like garbage, sewer, and even parking makes some sense, because it’s not like landlords get free garbage pickup from the city. They have to pay the city for that service. But there are some things that are considered to “come standard.” Charging for items like a mailbox is equivalent to charging extra for a car that comes with a steering wheel. Refusing to provide a working mailbox might even get you in trouble with the law.


Similarly, if you have access to free rental application software, then it’s not going to look great for you to charge prospective tenants $25 just to fill out paperwork online. You might think there’s little chance of that information ever coming out, and you might be right, but then again, tenants often know more than landlords realize.

Do residents keep complaining about it?

It can be impossible to predict how residents will respond to certain developments. That new parking fee for carports might be greeted with nothing more than a collective shrug, while a $5 charge for a lost key can seriously outrage people. Some things are worth holding your ground on, while other battles aren’t necessarily worth fighting. Renters insurance is an example of the former. If you institute a new rule that requires tenants to find renters insurance in New Jersey, then you’re obviously acting in the best interests of both sides. Some people may not like having to research insurance carriers and take out a plan, but they’ll adjust.

But at some point, you have to ask if a fee is worth all the blowback you’re getting. If multiple online reviews mention how unhappy they are with a new fee, that will hurt your image in the long run. Before you even realize it, you can develop a reputation as a landlord that nickel and dimes their tenants. You can quickly rehabilitate that image by pulling the fee and vowing to seek more resident input next time.