This is a column by our resident real estate expert Rachelle.

I have been renting properties in the GTA since about 1997. Here are my hints and tips for selecting the best tenants.

In our current market, if your place isn’t priced properly or is in bad condition you can look forward to bad tenants or periods of vacancy.

Today internet shopping has reached a new level and before people even come to see your apartment they have already shopped it for price, location and appearance. People used to take the first place they could find and now they’ll see many places before they make that buying decision.

As landlords we are competing for the best renters and with tenancy laws being the way they are, it is absolutely crucial to rent to good tenants. A bad decision will cost you 4 month’s rent or more in Ontario, plus any renovations that might be required after they move out. Even more importantly perhaps, the trauma inflicted by the experience of a deadbeat tenant is enough to scar people for life.

What Characteristics Do I Look For?

The selection process is absolutely crucial to weeding out the bad apples and moving the good apples into your place. From the moment I answer the phone I am evaluating the prospect and you should be too.

In my case I often have to “fit” the tenant to the landlord. There is more to a great tenant than paying the rent, especially in homes shared with the owner. Even with multiple tenants evaluating the customs and lifestyle of the building is essential to the landlord’s peace of mind. Tenants with different lifestyles may clash and then expect the landlord to mediate.

Here is my list of desirable characteristics. People who possess these characteristics make superior renters.

  • Organization: I like the people I select to be organized and be able to follow simple instructions. I tell every person I speak to “you must confirm the appointment by calling one hour before, if you don’t call I don’t go”. Believe it or not some people lack the basic skill of calling and showing up on time.
  • Preparedness: I love applicants who ask what they need to bring with them so they can rent the place. Some people bring a nice, neat package. The target market for the property will set the timeline. A family with children will be shopping several months before the move in date. A single guy looking for a basement bachelor might end up shopping the weekend before their move in date. In any case preparedness is an asset.
  • Financial Management: I want tenants to have financial management skills. If you can’t figure out how to get first and last together, I don’t want you renting any space I’m in charge of and I don’t care about your excuses. Please go be someone else’s problem.
  • Honesty: I want honest people renting from me. I affect a very friendly demeanor with potential tenants. This is deliberate. I don’t like being interrogated and I assume other people don’t either. So instead of telling the tenant all my rules and what I want, I am listening to them, asking leading questions, joking and getting them to reveal their character. If they are liars, what else are they hiding?

A common ploy among bad tenants is to manipulate your feelings and try to make you feel sorry for them. Learn to recognize this as a very serious danger signal. First of all it is inappropriate behavior to start divulging very personal information to your landlord. It’s the first time you’ve met and you know everything including the color of their underwear. Don’t rent to someone you feel sorry for or you’ll be the sorry one.

The Application

I have a very simple application form that I use. When I worked for buildings the application forms were often 2 legal pages long. Most of the information was unverifiable and unnecessary. When I developed my own application I wanted just the meat. I get copies of photo ID and SIN card, present landlord, pay stubs or if direct deposited bank statements to verify deposits from work, a few references, and of course on the bottom of the application I get them to sign for permission to do the credit check. The person you cannot believe is the previous landlord. The worse the tenant is the more they lie as their desperation to get rid of the tenant increases. Don’t judge, this may be you one day.

The Credit Check

The purpose of the credit check for renters is not to check their scores. It does reveal their payment history, which is important, but it also verifies all the information that is written on their application. On the credit check it will say who is their employer, their current address as well as any previous addresses. Pay particular attention to the dates of any moves. Moving every four to six months may mean that person is getting evicted or unstable.

Evaluating the Applicant Overall

Do not under dismiss your sixth sense. This may sound very new age but in fact about 60% of communication is non-verbal and our human instincts have been honed over millennia to keep us safe. I am pragmatic about most things, after years of experience, I don’t ignore my intuition. After I meet a tenant the first time I imagine how it would feel if they moved into the house. This is an easy way to get in touch with your gut.

RED FLAGS

When in doubt, just don’t rent to a potential problem tenant. Here’s my checklist of bad risks.

  1. Last minute renters
  2. Dysfunctional people
  3. People who won’t do a credit check
  4. People who try to manipulate your emotions
  5. People who smell bad
  6. Liars
  7. People who don’t have first and last month’s rent
  8. People who give you bad vibes
  9. People with implausible stories
  10. People with drug/alcohol issues

Do not under any circumstances tell them the reason why their application is being turned down. You don’t have to and telling them why may get you in trouble. You’d be surprised at what constitutes discrimination these days. So be safe and simply say “I’m sorry you didn’t get the space. Best of luck on your search”.

Safety First

When showing an apartment it’s a good idea to let someone know where you are going and call them as soon as the appointment is done. Three times in my years of showing and renting properties I felt like I was in imminent danger. I am a woman and I show apartments at night in questionable areas all the time. If this ever happens to you, do what I do, leave the space immediately and come back the next day to lock the door. Be safe and keep your wits about you. Just leave. No one is going to steal your empty or your applications. I cannot emphasize this enough.

Final thoughts on Tenant Selection

Do the paperwork and trust your intuition. In every single case where I have rented a property to a wrong person, when I look back, I had a “bad” feeling or a sense that “things didn’t add up”. Beware the miracle tenant, the person who shows up two days before the end of the month, who has perfect income who offers to finish your renovation work and pay above market rent.

Happy renting !!!

About the Author: Rachelle specializes in renting property on behalf of landlords. She also works with investors to find good investments in Toronto and surrounding areas. Her passion is bringing multi res properties back from the brink and maximizing profitability.

I've Completed My Million Dollar Journey. Let Me Guide You Through Yours!

Sign up below to get a copy of our free eBook: Can I Retire Yet?

Posted in

Guest Blogger

This is a guest post. You can read more about the author in the biography above.
Subscribe
Notify of

This site uses Akismet to reduce spam. Learn how your comment data is processed.

38 Comments
Newest
Oldest
Inline Feedbacks
View all comments
Celia
10 years ago

I’ve been a landlord in Alberta for 25 years. Once I have selected a potential tenant I do credit checks based on SIN, call current employer for employment verification, the current landlord and most importantly the previous landlord. As Rachelle states, the current landlord will say anything to get rid of a tenant but the previous is usually more candid. In addition to Rachelle’s Organization Package, I’d like to add: rent to tenants who apply at the beginning of the month. They have given notice, are prepared to move and know when the choice rentals are available. Deadbeats wait till the last minute hoping you will be desperate enough to take anyone. Be prepared not to rent the place after about middle of the month and suck up the lost rent. But continue to advertise the unit for the following month to get those super organized renters who want a place before they give notice. (30 days in AB)

Mike Anthony
11 years ago

Hi, I never handed out and would never hand out my SIN to landlord, ever. Landlords who told me otherwise did not receive my business.

After becoming a landlord, I have been relying on intuition and observations to pick tenants, I am still learning it, and the results so far have been promising.

Chris
11 years ago

I’m a tenant in BC and have never been asked for a SIN # . If they share their SIN # with me I might reconsider. I’m also a landlord (with amazing tenants). I do like the other suggestions. The first post by M James has a decent link to check out. Here is one section

When should you not provide your SIN?

In some situations, private-sector organizations may ask you to provide your SIN. Please note that, although this practice is strongly discouraged, it is not illegal.

Here are examples of when you do not have to provide your Social Insurance Number or show your card:

* proving your identity (except for specific government programs)
* completing a job application (before you get the job)
* completing an application to rent a property
* negotiating a lease with a landlord
* completing a credit-card application
* cashing a cheque
* applying for a video-club membership
* completing some banking transactions (mortgage, line of credit, loan)
* completing a medical questionnaire
* renting a car
* subscribing to a long-distance or cellular telephone service
* writing a will
* applying to a university or college

…..mind you most people share so much these days but frankly I am tired of handing out by birth date, my mom’s name and my first born, and on and on – for things I pay for.

elaine
11 years ago

I have rented in Canada and USA while attending higher education. I have had no problems submitting to credit checks and references, until I met the worst landlord in Cambridge, Massachusetts. He not only unlocks my place and drops in unaccounced (he walked into MY BEDROOM at 6AM to “repair a window” — I’m a young girl studying school here!), he also cashed one of my post-dated cheques one month early, leaving me with a bounced rental cheque of $2,000+ USD. When I left after a year he tried to say I never paid him first & last because I only gave him one cheque (of twice the amount = first & last) at the beginning of my lease; he also tried to say that it was a two-year lease when it was clearly written to be one. Hellish fury, he was a nightmare in a place where I had no family (GTA!!!)
Because of THAT pervy old scheming fart, I never do post-dated cheques now. I have a steady job and am happy to show you my pay stubs. I don’t do cash because one landlady did not write me a receipt for a month. I do personal cheques. Currently still saving for a deposit on a house (so close!)

Rachelle
11 years ago

You are not allowed to discriminate based on ethnicity, race, gender, disability, children, age, income, source of income.

For instance you are not allowed to discriminate against the one eyed, one legged, transgender bipolar schizophrenic mother with 5 children on Ontario Works who wants to rent your two bedroom apartment in your professional building even though the rent is $1500 per month and her check is only $1400 per month.

That is a big no-no because she has a human right to housing.

You must consider her application and hold it in equal regard to the single stockbroker who makes $110,000/year and has awesome credit.

Personally I think people who are too selective really pass by a lot of great tenants. I get calls from people who want to rent to a senior female or single male or female. I get people who want absolutely no pets. Problem with this is that if the tenants have a pet they can lie about it and move in anyways. Responsible people take care of their pets very well but will not lie about having a pet. Remember what I said about liars? So the great tenants who happen to have pets are weeded out and the liars are left.

It also come down to statistics. 25% of people smoke, another 30% have pets, 50% are male/female, many applicants will be couples (not sure what the stats are on that) plus they have to have the ability to pay the rent and want to live in your area. So… unless you are prepared to have the unit vacant for a long period of time you have to widen your search as much as possible. Other people want to rent only to their own ethnicity and religious affiliation. My number 1 criteria is the tenants must pay the rent. Almost anything else is forgivable.

Except for the guy who kept flashing the landlord and the other tenant. It is perfectly legal to be naked in your own apartment and if you open your door and people look at you what can you do? True story. I’m probably discriminating against him based on his mental illness which I’m not supposed to do.

Which is why I say you don’t have to give a reason for turning down an application and shouldn’t give a reason.

Dom
11 years ago

Rachelle,

I may not agree totally with what David said but why do you think his method is illegal / against HRC?

The Passive Income Earner
11 years ago

Great post and thank you for sharing. I am preparing to start in real estate and this is great information to have.

Rachelle
11 years ago

Ryan,

I would never buy a stock. People who buy stocks are all stressed out due to buying REITS like Lanesborough REIT and Huntington REIT. They spend all day stuck to their computer screens looking at how much money they lost. :) They will have to take an additional job instead of retiring. I’m sure your advice will be comforting to them as they ask everyone if they would like ketchup with their happy meal.

David,

Your method is probably illegal according to the Human Rights Commission. I’m sure you will adjust your methods now that you are informed and NEVER SPEAK OF THIS AGAIN.

As an aside in my years of doing collections and evictions I don’t recall ever evicting an immigrant. Not even people “visiting” Canada for over 6 months.

David
11 years ago

I’ve been a landlord for more than 10 years in Canada and here are some advice that may prove to be even more useful.

Don’t bother renting to locals. If they are not financially capable of owning a house then you don’t want to deal with them at all, especially if they’re living pay cheque to pay cheque. New immigrants and university students are by far the best tenants, and that’s all I will ever rent to now.

Majority of new immigrants are wealthy and educated, with properties and businesses back home, and they’re just looking for temporary cheap housing here for their occasional use or for their kids. They will have no problem writing up post-dated cheques or even paying you up to a year’s worth of rent in cash at signing. The downside is that they will generally want to deal with people who speak their language.
Well educated students are usually disciplined at managing their finances, or at least they will have rich parents who can easily afford to pay the rent from them.

The simple rule would be to look for tenants who rent because they need a second residence for whatever purposes, and not because they can’t afford to own. Finding tenants in these categories will easily increase cash flow, reduce expenses and time spent dealing with rental issues, and even benefit from their referral of classmates or immigrant friends to reduce vacancy periods. I’ve never had the need to do credit/reference checks…in fact I don’t even know the names to some of my tenants, but I know I always get my rent on time.

Ms Save Money
11 years ago

You list some great points here. Nowadays, choosing a tenant has become an almost impossible task especially if you want a trustworthy and reliable tenant. I also wouldn’t like a really loud and party-animal tenant. I’d like to party with them but I certainly wouldn’t like to rent to them.

@ Highlandjen: thanks for that pointer! I’ll keep that in mind.