The Perfect Tenant

The Perfect Tenant

It is a wonderful thing when your real estate investment is running on auto pilot. Rents are paid on the first of the month (every month), tenant does their own repairs (and improvements) and you never receive a phone call from the tenant. Sweet. 
 
But now your beloved tenant is leaving for another landlord. The work begins. Multiple open houses, carefully vet future tenants like the CIA to ensure the least amount of headache down the road. Thank goodness everything is so easy to do on Kijiji nowadays

If you are an aspiring landlord this post should help provide some prospective to getting what you want.

Income and Paystubs

The general rule of thumb for a landlord is for renters to make at least 40X the monthly rent as annual income. In other words, if the rent is $1,000 a month, the minimum the tenant should make is $40,000 a year. Prospective tenants should bring in their latest two paystubs and prior year’s NOA (Notice of 
Assessment). 

Duration of Employment

The longer you are at one company the better. If there’s a history of moving around every year, the landlord will put you in the bottom  
pile because the last thing a landlord wants is to have to go through the entire tenant screening process again so soon. Landlords want a tenant who will 
ideally stay for two years or longer.

Assets

It is preferred to have six months of rent in liquid savings or semi-liquid investments or more. A landlord’s fear is that a tenant loses his or 
her job, runs out of money in several months, stops paying rent, turns into the psychopath and destroys all your property! 

Letters of Reference

Almost every single landlord will experience some type of problem tenant if they landlord long enough. Letters of reference are important to 
verify a tenant is worthy. Please also provide the telephone number(s) of previous landlords so we can speak to them about 
their experiences with you. Many times, letters or emails don’t mean anything because the landlord is just being nice so that you can hurry up and 
get out of their place! As a result, please also provide work references or outside activity references as well.

Credit Report and Credit Score

The first thing landlord’s check is the credit score. The credit score is always used for screening purposes if there are many applicants. Even 
if there are only a couple applicants, a credit score is still used to gauge the tenant’s ability to pay the rent on time. It doesn’t matter how much you make or how much is in the bank if you aren’t a responsible payer. You need an actual score along with your credit report, otherwise, your landlord will suspect something is wrong. 
 
General Feel

One can do all the screening they want. At the end of the day, choosing the right tenant is a leap of faith. It’s the same for hiring  
someone for a job or admitting them to a school. You never know how the person will turn out until after they settle in. Bring a friend to meet with  
prospective tenants as well. We are often blinded by our unconscious biases about people that it is always good to have a different perspective. 

The longer you are at one company the better. If there’s a history of moving around every year, the landlord will put you in the bottom  
pile because the last thing a landlord wants is to have to go through the entire tenant screening process again so soon. Landlords want a tenant who will ideally stay for two years or longer.

The ideal tenant is someone who knows what he wants, has her financial ducks in order, and has a track record for stability and responsibility

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Sabbir Chawala

Sabbir Chawala

Broker/Owner
CENTURY 21 Innovative Realty Inc., Brokerage*
Contact Me

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