Selecting tenants and creating the right relationship from the start

Establishing good tenant/owner relations is paramount to a successful landlord business. The first time you meet your prospective tenant is going to set the tone for the relationship and either create a positive atmosphere with clear rules and expectations or an atmosphere that can become negative and riddled with issues. 

The first interactions between you and your prospective tenant will likely be a telephone call from them inquiring about your property for rent, followed by a showing. It is vital to pay close attention to the kinds of questions your prospective tenant is asking you and their responses to you. So much information can be gained even from these short interactions. For example, make sure you pay very close attention to their use of words such as, 'we' and 'us', especially if they claim to be living alone. Questions about fencing or indirect questions about pets. Pets and roommates are often purposely not disclosed on the rental application by the prospective tenants for fear of not being accepted. So pay close attention to the subtle clues that they offer you. I tell my clients to pay attention to their "gut feel". It can be helpful to have two people conduct the interview. One persons job is to simply observe the person.

The next step is the application, credit check, and background check phase. These are really important steps in the process. This is where you get to ascertain if the prospect has sufficient income to pay the rent. My rulle of thumb is that they are not spending any more than 40% of their gross income on rent (preferably below 35%). The credit check can tell you if they have the discipline to pay their bills. If a prospect has numerous late payments and horrible credit then a landlord should follow their written criteria and not be swayed by any other factors. It is crucial to the success of a landlord to follow income, credit, and any references provided. It is really important to make sure that you follow up with their job letter and verify its authenticity. Remember that selecting the right tenants will make the rest of your job easier. You do have obligations in selecting tenants. Be sure to understand all the applicable rules surrounding the selection process.

Once the landlord has found their tenant, it's time to draft and sign the rental or lease agreement. Be sure that your lease is compliant with the rules governing your jurisdiction. Not following the rules can cost you time and potentially fines. Some leases and clauses I have seen are unenforceable at best and against the law at worst. If you are in Ontario please got to for more information. In the lease it is important for the landlord to spell out what is expected of the tenant. Some agreements ask the  tenant to complete routine maintenance such as changing air filters, light bulbs, smoke detector batteries, etc. In some cases it is better to have a licensed contractor or yourself complete hard to complete routine maintenance to prevent a potential injury lawsuit and also to make sure that it is actually completed. By doing the maintenance yourself, it also allows you the opportunity to enter the house and verify it is not being used for illegal activity or causing damage. Tasks that may be dangerous such as those requiring use of a tall ladder could be completed as part of the annual inspection process.  It is the landlords responsibility to provide the tenants with quite and peaceful enjoyment of the property while still protecting his or her investment and ensuring the property is safe and up to code.

It is important to keep a good working relationship with tenants, this will prolong their tenancy and make life a lot easier. It is important to not befriend your tenants otherwise they will want exceptions to the rules. Keep the relationship business as usual and don't break your own rules or at least not very often. As with so many other areas of our lives, having a plan and the discipline to follow that plan will make all the difference in success.

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Mike Andrews

Mike Andrews

Sales Representative
CENTURY 21 Leading Edge Realty Inc., Brokerage*
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