By Lee Strauss
After all the hours of research and stress involved in locating, inspecting and purchasing the perfect rental property, the next step is probably the most important part of the whole process – finding a good tenant.
Ontario, where I invest, is a pro-tenant province. Once the tenant moves in, they have the upper hand. It’s an unfortunate situation for the landlord if the tenant turns out to be less than perfect. Not to mention, the possibility of a less than perfect tenant living in YOUR house. Hopefully, they are still making their monthly rent payments, but this is obviously a situation that all investors want to avoid. So, how do we do that?
Naturally, you would meet the prospective tenant face-to-face when you show them the rental unit. Ask yourself: How do they present themselves? Did they arrive on time? Do they take off their shoes when they come in the front door? If they brought their children with them, how did they behave? Is their physical appearance "put together" or do they look unkempt?
One interesting trick that was passed on to me from my Dad was to walk the prospective tenant out to their car and look inside. Is it a total disaster inside? Chances are good that the interior of the car could reflect how they will take care of the home. Most of all, rely on your instincts when meeting the tenant.
Always do a proper credit check and be sure to verify all documents, including identification, paystubs, T4s and notice of assessment references. When you’re provided a phone number to call for a reference, be sure to Google the company name and call the direct line to the company asking for the supervisor as opposed to calling the given number, which could possibly be a friend of the tenant pretending to be someone else. Sounds strange, but it does happen!
These are a few of the many ways to qualify and screen a potential tenant. In the end, you’ll still be taking a leap of faith in your candidates. Of course, you can continue to minimize your risk after you select a tenant and they move in by doing periodic scheduled checks of the property.
The tenant is your customer and one of your top priorities; it’s important to remember to treat them well and hopefully they will reciprocate that treatment to you and your property. Good luck!
Next month, my article will be: “The benefits of having as many properties as possible – Breaking down the pros and cons of having multiple properties.”
Lee Strauss, an investor based in Kitchener, will be speaking in the Editor’s Room at CREW’s InvestorForum, which will be held at The International Centre in Toronto on March 28 and 29, 2015.
Find out more about the event and register for the InvestorForum here
Are you looking to invest in property? If you like, we can get one of our mortgage experts to tell you exactly how much you can afford to borrow, which is the best mortgage for you or how much they could save you right now if you have an existing mortgage. Click here to get help choosing the best mortgage rate
Investment Hot Spots:
Saulnierville Station, Saanich, Campden, Dead Man's Flats, Coldwater