Even if you don’t (or haven’t) owned residential rental properties, chances are you’ve heard a horror story or two about the “tenant from hell”. Anyone who’s gone through the ordeal of trying to evict a tenant who has stopped paying rent or has simply failed to keep up his or her end of the bargain and has trashed the home knows the pain. But in reality, most tenants tend to be reliable, pay their rent and take care of the home. This post is intended to highlight some tips and tricks to help landlords find the right tenants.
Legitimize your advertisements Whether you are using Kijii, Craigslist or Viewit, there are a number of ways of putting together a solid online ad, but one trick worth mentioning is to throw in “we do backgrounds and credit checks”. This will land you a greater number of qualified leads and filter out the “fluff”.
Perform proper credit checks For Roughly $20, you can order a credit check from either Equifax or TransUnion. They’re worth their weight in gold. Also consider joining the Ontario Landlords Association, where after becoming a member you can perform a credit check for as low as $10.
Request and use references Most prospective tenants will provide references, but exercise caution. They could be friends and/or family or even a current and disgruntled landlord who will lie just to shovel his or her problem onto you. Know who you are speaking with and try for previous landlords.
Verify identity using social media Use social avenues like Facebook and LinkedIn to verify that an individual is who they say they are. It might not work all of the time, but used in tandem with other points listed here, this could help filter out fraud or other fishy activity.
Push for a face-to-face interview Most people are much more comfortable speaking over the phone than they are in person. Push to meet the prospect in person for a better gauge of what type of person they are and whether what they are telling you is true or not. Look for the usual suspects: fidgeting, little eye contact (keep shyness in mind), constantly changing the subject etc.
Use open-ended questions during conversation These are useful for maintaining conversation and uncovering hidden details about someone. “Why don’t you tell me a little more about yourself” or “describe your current living arrangement”. It never ceases to amaze me how important the simple questions can be.
Gain insight into their current living arrangement If at all possible, ask to stop by their current place of residence for the screening interview. While not always feasible, this will give you first hand insight into their living arrangements and will show you how they live. It might also shed some light on whether they are trying to conceal a pet.
Be fair and reasonable with rent charged Understand the concept of mutual benefit. No doubt you have an investment to protect, and your monthly rental income is your smoking gun. But keep in mind that tenants who feel like they are being overcharged or taken advantage of will move on, quickly. Even worse, they may take out their frustration on your home. Know what others are charging in the area and if possible, give the tenant a deal on their rent to ensure a good relationship. It will save money in the long run by avoiding repairs and filling vacancies.
Provide incentives While used less commonly, this technique can pay in spades. A percentage relief in their last month’s rent for paying on time for the entire year up to that point? A small gift at Christmas time? A small case of beer or liquor for student rental tenants when they first move in? From first hand experience, I can guarantee you that these small incentives pay off huge. Try it out.
It all comes down to two things: do your homework in advance and treat the tenants like you would want to be treated yourself. People often lose sight of the fact that they purchased the home as an investment. Why not do what you can to preserve that investment by looking after the tenant, who will in turn look after the home. Win-win? Sign me up!