Yes, you can charge an application fee, but I think it’s a mistake to
blindly charge $25-30 or whatever seems to be the “going rate.” Some
landlords charge application fees and aren’t upset when someone
refused to pay it, since they consider it just another way to weed out
those who aren’t serious. But if you are on a slow market and a tenant
refuses to pay, it may be because they know there are other properties
that are not charging application fees. You better pay attention and
either reduce yours or eliminate it entirely if you hope to get a
sufficient number of applicants from which to choose. Some landlords
use application fees as another profit center. Charge $25 for a report
that only costs $10, for example. Personally, I’m happy to only collect
what it costs me, and will try to make my profit other ways.
I like to use the service that’s on Mrlandlord.com. It’s quick, simple,
and pretty cheap. Only $9.95 for credit check, and $14.95 if you also
want to check for prior evictions. You can do it all on the computer.
They don’t even ask you to fax in a copy of the tenant’s application,
which I had to do with my old service. I just started using them, and so
far am very impressed.
Another data point: I use Accurate credit bureau - you can find them at www.accuratecredit.com. Prices run from $12.95 for a single bureau report to $80+ for more comprehensive background checks. That’s as of the sheet I’m looking at right now, anyway - check online 'cause rates might have changed.
And as for charging it to the tenant - it’s a free market out there. Got a hot property in a tight market, stick it to the applicant.