Always – I repeat- always take an application fee with the application. Don’t even bother processing any part of the application unless the tenant has paid the “application fee.” This amount can be whatever you’d like (and whatever the market will bear) but I recommend finding out what the local property management companies are charging and charge a similar amount. Currently, I charge $35 for the first adult and $20 each adult after this. Be sure to check with your State laws and make sure there are no laws dictating how much you can charge.
The application fee covers the cost of the background check, but it doesn’t have to be equal to that amount (you can get paid for the hassle of needing to check their background.) However, I recommend not being dishonest and don’t take advantage of tenants with this fee. The application fee should be reasonable.