All Forum Posts by: Bruno P.

I am not aware of any issues with using third-party screening services. Technically it's up to $25 and not to exceed your actual cost of the credit report.

We use Zillow applications to pre-select and run a full background check on mysmartmove only with the final candidate. The applicant needs a credit card to complete the process and they charge more than $25.

A lot of landlords in Milwaukee do the same. I am on the board of the RPA (Rental Property Association of Wisconsin, a non-profit) and typically hear if things like this are an issue from our members or attorneys. There is some legislative push-back on "junk-fees", but every example I have seen was IMO truly a rip-off.

Thanks Marcus, very helpful! I'll consider the strategy of pre-screening with Zillow and using mysmartmove with the final candidate!

1 Vote

Milwaukee, Wisconsin

Quote from @Nathan Gesner:

Quote from @Bruno P.:

Here's a good guide with links to the law: https://www.tenantresourcecenter.org/earnest_money

If you charge $25 and the credit screening costs $10, you can keep the $10 as income. If the credit screening costs $25, then you earn nothing.

I believe there are exceptions for a higher fee, but you have to stick to the actual cost of the screening.

I would talk to an attorney before charging more than $25 per applicant. You probably don't run many applications, so I wouldn't sweat losing a little money on each one. You can pre-screen them for free, then run the credit/criminal background only for those that pass your initial review so you're not wasting time.

Thanks for the answer and the helpful link!

1 Vote

Milwaukee, Wisconsin

Hello!

I'm using a property management software (TurboTenant) for rental applications and screening reports, and they charge each prospective tenant $45 for this service.

However, the Wisconsin State Legislature states that the landlord can only charge the actual cost of a credit report (up to $25). If the tenant is from another state, a background check cost of up to $25 may also apply (sec. 704.085).

It is unclear to me if I am actually in breach of this rule by charging the tenant more than the $25 limit, even though it is through a third party. Additionally, ATCP 134.05 says that if the tenant provides a consumer credit report from an agency that compiles and maintains files on consumers on a nationwide basis and it is less than 30 days old, the landlord may still run a credit check but at its own expense.

When I inquired with the company, they replied: "These laws are in place to ensure that you, as a landlord, are not profiting by incentivizing multiple applicants to apply when you have no intent to rent to them. As a third-party software company that does not own or manage any properties, we charge renters a screening fee, not an application fee. This charge covers the cost of generating the screening and background reports."

I understand that these rules vary depending on the state, but any thoughts on this? It is such a common practice for these management software companies to charge these fees, so I assume it is not an issue, especially since they are a third party and the fees cover more than just the credit checks.

Any insight is helpful!

Thank you!

1 Vote

Milwaukee, Wisconsin

Thanks everyone for the warm welcome and great tips!

0 Votes

Chicago, Illinois

Hi everyone,

I'm new to the world of real estate investments. I recently started studying FI strategies and it led me to this community!

I live in Chicago and plan to buy my first house hack by end of year/beginning of next year.

Looking forward to learn from all of you!

2 Votes

Chicago, Illinois

All Forum Posts by: Bruno P.

Bruno P. has started 2 posts and replied 5 times.

Post: Screening Fee amount (is it OK to charge more than $25 in WI?)

Post: Screening Fee amount (is it OK to charge more than $25 in WI?)

Post: Screening Fee amount (is it OK to charge more than $25 in WI?)

Post: New to real estate investments. Want to start with small multifamily in Chicago.

Post: New to real estate investments. Want to start with small multifamily in Chicago.