A consequence of the COVID-19 pandemic for landlords is that they’ve lost leverage over renters, but there are still ways to optimize the search for responsible, respectful occupants who pay rent on time.
Brett Starke, team lead of Starke Realty at PSR Brokerage, recommends landlords use a real estate sales agent to help them narrow down their search for the ideal tenant, whom he describes as somebody securely employed in a sector of the economy that won’t become obsolete in the near future, because of COVID-19 or otherwise.
“You’re seeing a huge exodus from Toronto of service staff at restaurants who are moving into their parents’ places in the suburbs because landlords aren’t renting to them,” said Starke. “In times like today, a good credit score matters so much more because it shows how you’ve dealt with difficult situations in the past. A credit score sheds a lot of light on people’s personalities over the last seven years of their lives.”
Ideally, landlords shouldn’t have personal or pre-existing relationships with their tenants, because should the latter fall on hard times they might be less inclined to prioritize paying their rent, added Starke.
Checking a potential tenant’s social media pages is another way to ascertain what kind of character they have and how responsible they will be living in your unit. Although it could be argued that surreptitiously researching someone’s social media pages is an invasion of privacy, Starke says protecting a six-figure investment takes precedence.
“That gut feeling from looking at their social feeds is invaluable because it can reveal a lot of red flags,” he continued. “I’d look at their job history on LinkedIn, and their Instagram and Facebook profiles. I’d even look at their TikTok page to see what kind of videos they’re posting. Their social media feeds paint a picture of them; you can see if someone parties too much or takes a lot of trips or is dedicated to their work.”
LinkedIn, Starke added, is probably the best way to determine how responsible a potential tenant is.
“You can see their previous employment history, as well as how long they stay at all their jobs,” he said. “If they change jobs every six months, even if they have a good credit score, that might tell you something about them. Corporate tenants who have stayed at one company, and whose promotion history you can see over LinkedIn, are my favourite ones.”
It goes without saying that landlords should contact their potential tenant’s previous landlords, but Starke recommends doing additional research and ensuring the person is who they say they are and not a friend or family member posing as a previous landlord.
The pandemic has made finding tenants, let alone good ones, difficult. However, according to Erica Mary Smith, broker of record and co-founder of Stomp Realty in Toronto, a landlord who’s flexible on pricing should remember to keep their eye on the future because the market will rebound. Moreover, if they’re willing to compromise on pricing, the tenant will likely accept a looser lease structure.
“I tell my landlord clients to work with their tenants if they’re good tenants, because it’s hard to find tenants now, especially good ones,” she said, noting that Toronto rents will be frozen in 2021.
“If a unit was historically leased out for $3,600 but now it’s only getting $2,900, instead of signing another lease, just go month-to-month. You can’t get rid of the tenant just like that, but if you’re charging $400 or $500 less a month, at least you won’t be locked into the full year.”
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