Most residential tenants are long-term tenants who pay their rent on time and properly look after a landlord’s property. The trick is to do the proper research in advance so that you do not end up with the tenant from hell. Here are some tips:
1. When you advertise for tenants, whether on Kijiji, Viewit or gottarent.com, also state “we do background and credit checks.” You will receive a greater percentage of qualified tenants.
2. Do a proper credit check using Equifax or TransUnion. The cost is approximately $20. Or join a group such as the Ontario Landlords Association where after becoming a member, you can do a credit check for as low as $10, and use their supporting materials to assist you.
3. Call all references, especially prior landlords. Remember that the current landlord may be lying just to get rid of them. Start with the previous landlord.
4. Check social media. Google the tenant to make sure the information checks out with their rental application. In addition, if you are concerned about possible pets, check Facebook. If the tenant has a pet, there will likely be a picture of them with the pet on Facebook.
5. In a face-to-face interview, there are signs that may indicate the tenant is not being truthful. This can include one or more of the following: incomplete answers, not looking at you when they speak, changing the subject, fidgeting, dropping names of important people, or volunteering to do odd jobs for you.
6. Ask open-ended questions such as “Tell me about yourself” or “Why are you leaving your current apartment?” You will be surprised how much you can learn about someone with such simple questions.
7. Interview the tenant where they currently live. You will see first-hand how they treat someone else’s property. It is also hard to hide the smell of a pet, if you are concerned about that.
8. Give the tenant a deal. It should not be about charging the highest rent possible. When tenants think they overpaid, they will almost immediately start looking for another place to live. Give tenants a break and they will be happier and stay longer.
9. Give tenants incentives. Why not a $10 gift card if the rent is paid on time? Or a Christmas present, just to show that you appreciate your tenant. Treating a tenant with respect often results in the tenant not only paying the rent on time, but they will also take care of your property better.
10. Consider rent to own. In a rent to own, you give the tenant the option to buy your property at a set price two to three years from now. In this way, you can guarantee your profit if the tenant exercises the option and the tenant has extra motivation to look after the property even more carefully, since they may end up buying it later.
By doing the right research in advance and treating your tenants with respect, you can ensure that your real estate investment continues to increase in value.