Are you missing out on key opportunities to increase profitability in your property management business? Tenant-related fees aren’t just extra charges—they’re compensation for the additional tenant related services and time you invest in providing those services to your tenants.

(Some cities and states have made it illegal to charge specific Tenant-related fees (or Tenant-related fees of any kind) but even where it’s not illegal they are often overlooked, yet they represent a critical piece of your revenue stream.) 

These fees ensure that your management company is compensated fairly for the extra services, time, and effort involved in managing tenants and maintaining quality homes for them to live in.

In this article, we’ll explore various tenant-related fees that can help you maximize profitability while maintaining transparency and trust with your tenants.

Setting the Foundation for Fair Tenant Fees

Tenant-related fees aren’t just about covering costs—they are a fair way to compensate your property management company for the time and effort you put into managing tenant relationships, lease agreements, and property upkeep.

List of Tenant Related Fees

Below is a list of a few of the more common tenant-related fees and a brief description of each.

Make sure your management agreement states that the property management company retains all tenant related fees. Retaining these fees are payment for all of your hard work and compensation for your time. 

1. Application fee​: A fee charged to each tenant applying for a rental in the property management company’s portfolio. Typically each tenant 18 years old and older must be on the lease which requires each adult to complete a lease application. The application fee should cover the cost of any actual expenses, company time to process and profit where allowed. 

2. Month to month fee​: A monthly fee charged at the end of a lease term which allows a tenant to continue renting the property on a month to month basis

3. Posting fee / notice delivery fee​: A fee charged whenever a tenant has violated the terms of the lease or any related governing documents and the violation must be posted on the property or a notice must be served. 

4. Late fee​: A fee charged each time the tenant pays any portion of the rent late. Rent is due on the first of the month and late on the second. There is no grace period. The late fee is typically addressed in one of the following ways: 

a. Landlord gets the late fee. 

b. Landlord and property management company split the late fee. 

c. Property Management Company retains the late fee as overtime pay for having to chase the tenant down to collect the rent. 

5. Roommate removal fee​: When a set of roommates request to have one of the roommates removed from the lease and all remaining tenants will still qualify to rent the property, prepare a Roommate removal addendum and charge a fee for processing the paperwork. Make sure to address the security deposit in the addendum. 

6. Roommate addition fee​: When a tenant requests to have a roommate added to the lease and the new tenant qualifies to rent the property, prepare a Roommate Addition addendum and charge a fee for processing the paperwork. Make sure to address the security deposit in the addendum.

7. NSF fee​: A Non-sufficient funds fee charged any time the tenant makes a payment that does not clear. This could be due to a lack of funds or due to the tenant entering their bank account information incorrectly in the online rent processing system. 

8. Payment plan fee​: If you allow tenants who fall behind to get caught up using a payment plan charge an administration fee for managing the payment plan. 

9. Lockout fee​: A fee charged if you provide access to a tenant who is locked out of their home or if they come to the office to check out a key. Consider one charge during business hours and an additional charge for after-hours access. 

10. Rekeying fee​: If the tenant rekeys the property without the property manager’s consent or if the tenant requests a rekeying of the property charge a rekeying fee. Some property management companies have this as a standard fee to the tenant on each lease and the property is rekeyed at the tenants expense either right before or right after occupancy. 

11. Rapid security deposit fee​: Your lease should specify that you will process the Security Deposit Disposition with the latest date allowable by law. This allows you to have the most time to determine damage and process outstanding tenant fees. In the event that a tenant wants to shorten the time it takes to receive the Security Deposit Disposition and any funds due to be returned, offer the tenant a Rapid Security Deposit Processing and charge an appropriate fee for accommodating the request. 

12. Pet admin fee​: If you allow a tenant to have a pet on a property you may have additional tasks such as processing a pet application, lease pet addendum, additional inspections, additional work at tenant move out from pet damage. This fee helps compensate your firm for the additional time and effort required to accommodate a tenant’s desire to have a pet. 

13. Pet black light fee​: If you allow a tenant to have a pet on a property you may want to perform a black light test prior to a tenant moving in and then again when the tenant vacates documenting the test with photos and/or video which will display any additional damage caused by pets relieving themselves indoors. This fee will cover the cost of performing the test and preparing the documentation. 

14. Pet inspection fee​: A fee charged on a monthly, quarterly, or yearly basis for inspecting a property for damage done by a tenant’s pet. This is fee is charged as an inspection fee regardless of whether or not there is damage. 

15. Furnace filter replacement fee​: This fee is charged to the tenant and/or landlord every three, four or six months for having the management company coordinate the furnace filter replacement. If the management company is coordinating the replacement of the filter it guarantees that the filter is being replaced, prolonging the life of the furnace and providing cleaner air for the tenant and it also allows a trusted vendor to access the property to look for lease violations and verify the condition of the property. 

16. Utility transfer fee​: an administrative fee charged when transferring a utility into the tenants name at the beginning of the lease and out of the tenants name when they vacate. 

17. Lease administration fee​: A fee charged when preparing a lease or lease renewal. This fee is common in the apartment industry. 

18. Lease renewal fee​: This fee is similar to the Lease admin fee but is charged for each lease renewal. 

19. Move-in video fee​: If the tenant would like you to video the condition of the property on move-in to use as evidence of the condition of a property when they move in then you can offer to video and store the video as part of their file. They can then use this video to defend against any damage claims on move out. 

20. Appliance rental fee​: If you offer rentals without washer & dryer or refrigerator you can offer to facilitate the rental of these appliances. 

a. You can rent appliances in your company name and then leave them in the unit for the tenant to use. The fee charged should cover the cost of the rental plus a reasonable profit for the amount of risk you are taking for having the appliances in your name or, preferably, 

b. You can purchase used appliances and then rent them to the tenant keeping a reasonable profit. 

21. Convenience fee​: If you provide a convenient way for tenants to pay the rent online, charge a small convenience fee per transaction. Or conversely, if you prefer you could require tenants pay online and if someone wants to pay by check or in person charge a convenience fee. 

22. Tenant holdover fee​: If a tenant holds over a property without a valid lease in place it will most likely cause extra time and effort on your part to adjust vendor schedules, property walkthroughs, new leases, etc. and charging a Tenant holdover fee will compensate you for your time. You should make sure that the daily rent also applies so that your landlord keeps the rent and your management company keeps the tenant holdover fee. 

23. Re-letting fee​: A fee charged to the tenant when they fail to honor the full term of their lease and the property must be remarketed for rent. This is not simply a fee to get out of the lease, the tenant remains responsible for the rent until the property is re-rented. This fee compensates the management company for the additional work involved in re-letting the property. Often, when collecting a re-letting fee from a tenant, the leasing fee charged to the landlord is reduced by some percentage.

24. Eviction administrative processing fee​: This fee is charged to the tenant when if/when the property management company files for eviction. This fee is added to any outstanding balance owed by the tenant and is paid out using the security deposit or is sent to the collection agency as an administration / processing fee. 

25. Verification of rent fee​: this fee covers the time it takes to complete a verification of rent form and send to a mortgage company or another property management company. 

26. Deposit Reduction fee​: A fee charged to the tenant to put down less than full deposit. Full deposit must still be guaranteed to landlord by management firm. The management firm is essentially guaranteeing the remainder of the deposit in the event that the tenant exceeds the amount of deposit that the tenant provides in accordance with the lease. 

27. Split deposit fee​: A fee charged to the tenant to split the deposit into multiple payments. 

28. Move out mow or move out shoveling fee:​ Allow the tenant to move out without mowing the yard or shoveling the walk right before move out and charge a fee for coordinating with the vendor and of course add the actual vendor costs to the tenant’s ledger. By planning this project ahead of time it allows the tenant to have the flexibility to move without worrying about this activity while preparing to move and that this will be taken care of at a lesser price than if they waited until after they vacated and the expenses it is taken from the security deposit.

29. Move out trash removal fee​: If the tenant leaves trash inside the house or inside the garage and it must be removed from the property (this includes setting the property on the curb for normal trash pickup) charge a trash removal fee. 

Tenant-related fees are a vital part of ensuring that your property management business remains profitable. By implementing one or more of these ancillary fees, you’re not only covering your costs but also compensating yourself for the additional time, effort, and risk involved in managing tenants and their requests and actions. 

Make sure to include these fees in your management agreements and remain transparent with tenants, so they understand the value of the services you provide.

Ready to optimize your tenant-related fee structure and boost profitability? Let’s work together to fine-tune your business. Contact us today for a free consultation on how to implement these strategies and make your property management business more profitable than ever.

P.S. – For more information on implementing new fees you can watch our video “Increase Your Property Management Income: Profitability Through Professionalism”