If you are renting out your property, screening tenants is an absolute necessity to ensure that you and the home remain secure. Through our collective decades of experience we’ve found that these are the best methods to keep both parties comfortable. You don’t need a realtor to accomplish this, but it will definitely take some time as well as due diligence.
The first thing you have to do is to market it for rent. We would strongly advise utilizing online resources such as Viewit.ca, PadMapper.ca, Kijiji, FaceBook Marketplace or Craigslist. The nicer it shows in photos and video, the better pool of tenants you will get. A coat of paint can go a long way, ensure that the colour is neutral with preferably modern and light tones. Remove all of the clutter to make it appear similar to a model home so the potential renters can envision themselves inside. This all helps to cast the widest net possible.
Try not to show the place whenever a prospective tenant calls, set boundaries for yourself. It creates a sense of urgency if you have more people in at specific times, as you can fill the location so they can see there are many interested parties. The more in-demand your place looks, the sooner it will be unavailable.
If you want to ensure security of your asset, you have to have tenant standards and requirements. Peace of mind is very important as they will be occupying what is likely your biggest investment. They need to show financial prowess so that they can keep up with payments and be capable of maintaining the property. This is proven through their bank statements, credit check, employer information and personal references. Ensure they fill out the rental application, which should highlight all of the necessary information. Ensure that you get a credit report (which you will need their consent for), if they decline, that is a big red flag. This typically costs $20, which is miniscule compared to the cost it could save you down the line.
Don’t be afraid to interview them over the phone to save you and them time, this will help you get a better sense of who they are, along with more peace of mind. Ask them if they’ve ever been evicted or broken a lease agreement. You want someone who can comfortably afford the rent on time, ensure you ask how much of their money is being tied up in rent. How many people will be living in the residence? You don’t want an abundance of people living in a place that’s too small as that generally comes with more repairs after the fact. It’s wise to have personal references to see if what they’re telling you is accurate. Call references to get a better sense of the applicant. Contact the HR person at their work to find out their income range to see if the applicant is fudging the numbers. You can ask a realtor to check the title owner of property to find out if they provided you with the actual previous landlord’s information and it isn’t just a friend of theirs. Pull their credit report, ensure you get their consent, don’t get it from them as they can utilize Photoshop to inflate their numbers. Having no credit can be just as bad as having poor credit as you don’t know the history.
When they arrive have rental applications ready, so they can fill them out right away. Have a one page feature sheet which briefly describes the place along with pictures to make it stand out. Follow up with them to get feedback on if it showed well and if they feel it was priced right. This feedback could greatly help you in the future. Find out what other properties are renting for in your area to get the true value of comparable rents.
We would advise not shying away from student housing as it is a strong source of revenue. They will likely not have a credit score but you can pull information from the parents and guarantor to know that if they are a wise occupant. If they don’t have any employment information, you can get it from their guardians to ensure that the liability is not on you.
We insist that you look into the prospective tenant’s online presence, as people generally document their entire lives, whether it be on Twitter, Instagram or LinkedIn. If they don’t have anything, it would be wise to look at other candidates.
A concern that many people have are pets. We’ve found that animals generally aren’t that big of a deal in terms of the mess they create. It’s the renters that are by far the most damaging aspect.
Ensure that you get first and last month’s rent before you hand the keys over. You want to make sure that you are as protected as possible before anything is finalized. Renters generally don’t create any issue in terms of payment, but you need to be cautious as this is a possibility.
We advise leasing the property rather rent as this denotes a set and generally longer amount of time. At least a year would be preferable, longer if possible. Draft a lease agreement which states the property, rent, security deposit and utilities provided. The template for your province’s form is available online. After the standard form is filled in, speak with a lawyer about adding clauses so you can add any stipulations legally.
We prefer to collect rent rather receive post dated cheques to ensure that the tenant is happy while also having the opportunity to check on the property without being intrusive. If the property is bare bones after months of tenancy, it’s possible that it could be utilized for illegal activity. You are allowed to give 48 hours notice of a home inspection as the landlord, if you see anything that is breaking the law it’s then time to contact the police. If you’ve done your due diligence, it’s very unlikely that this will occur.
Have a coffee with your tenant, get to know them. Give them a thank you and a bottle of wine after everything is finalized, it is a business after all. If they get to know you, they will be more inclined to treat your property with care. Give them your contact information just in case they need anything. Little things go a long way, they will be more inclined to stay which will save you time and money.
This whole process is about mitigating risk. Verify everything before you finalize the agreement. If you have any hesitation towards the tenant move on to the next one, especially in Toronto the tenant pool is massive. You will be secure if you do your due diligence.