In my Landlord’s Handbook series, I’ve talked about getting started and knowing your rights as a landlord in Toronto. In part three, I’m going to share some tips and tricks to finding The. Perfect. Tenant.
Yes, you read correctly – the perfect tenant.
In an ideal world, choosing a tenant would be a breeze. For some, it is. But you also hear some pretty outrageous horror stories. Finding the right tenant is definitely an investment of time and energy, but it ends up paying dividends in the long run. Trust me.
Remember all the prep and research you did before buying your condo? It might sound ridiculous, but you should be devoting as much effort into finding a tenant. Look at it this way: you’ll be entrusting someone, possibly a perfect stranger, with your investment. Plus, a considerate tenant who stays in your unit over a number of years is a massive asset. They’ll bring you one step closer to realizing your financial goals.
The good news? Right now, Toronto’s rental vacancy is really, really low. Around 1% of all rental properties are unoccupied. Less than a quarter of those are freehold condos. This means there’s a good chance people will be competing for your unit. Having options always helps.
Posting Your Ad
In part one, I discussed some of the advertising opportunities that are available to a would-be landlord. Whether you choose to go the online route, list in a newspaper, use a tenant agency, or an agent is totally up to you. Remember though, if you’re listing a unit for rent, you’re advertising. All good advertising should have a target audience.
Who’s your target?
Whether this is a discussion you have with your agent or something you consider when you’re writing the rough draft of your ad, think about who your ideal tenant might be. Are they a young professional? A quiet couple? A student? Remember: write for your audience. Chances are, these are the people you’ll hear back from.
Obviously you can’t select or refuse tenants on the basis of race, place of origin, ethnic origin, religion, sex, age, sexual orientation, marital status, family status (e.g. children) or disability. In your ad, you can specify that you’re looking for non-smokers or people who don’t own a pet—though, in the second case, if a tenant decides to get a pet after they’ve moved in, there’s very little you can do about it.
Meeting Your Candidates
So you (or your agent) have listed your unit, gotten some responses, and now comes the fun part: viewings! Viewings give prospective tenants the opportunity to appraise your unit, and they give you the opportunity to appraise prospective tenants.
Whether you’ve arranged the viewing yourself or through your agent, remember to have questions prepared. Also, when it comes to meeting possible tenants, follow your gut instinct. Intuition can be surprisingly accurate, so if you have a bad feeling about someone, listen to it.
- Ask them about their job.
- Ask them where they currently live.
- Ask them how long they’ve lived there.
- Ask them why they’re moving.
Don’t be afraid to ask too many questions, and encourage potential renters to do the same. If you have an agent showing your unit, consider having them set up interviews with you. I’ve actually done this for some of my own clients. This gives you the chance to meet a tenant before handing over the keys. Keep track of candidates who stuck out to you, so you remember them if and when they make an offer.
Finally, be clear about the documents a renter will need to submit in their application and be sure to provide them if need be. These include:
- The Ontario Real Estate Association Application Form – While this rental application form is pretty exhaustive, you might want to make your own. For example, one of my clients used an application form asking would-be renters whether or not their employment type was salary, or contract, just to get a sense of how stable their employment situation was. Whatever the case, be sure your application form includes rental history, previous landlord references, employment history, and personal references.
- Credit report – Reports from Equifax are my clients’ go-to.
- Proof of Employment – Make sure this is on company letterhead with a reference you can follow-up with.
Wait for an Offer
Because of the competitive renter’s market, chances are you won’t have to wait too long to get your first offer. As offers start coming in, do a little detective work. Look up a candidate’s social media and online presence. Make sure they are who they say they are. Some people will probably go above and beyond when they submit their offer. If a prospective tenant submits a personal letter or does a little bit extra to prove that they’re really interested in your unit, they might just be the tenant you’re looking for.
Cross reference that list you made of candidates who stuck out to you in person. Did any submit an offer? If so, these should be the ones you reach out to first. Also, don’t be afraid to follow-up with people who made a really good impression, just to see if they’re interested.
Be sure you send a lease to a candidate you feel totally confident about. Never settle. If you’ve put in the legwork, you can rest assured that you have your perfect tenant.
I understand how time consuming this process can be. Stressful, too. If for any reason you have questions, concerns, or you just need someone to bounce some ideas off of, get in touch. I’d be happy to help!
Any suggestions or landlord stories you’d like to share? Leave them in the comments below!