Are you a landlord looking for your next tenant? Perhaps you’re a homeowner or first time investor looking to acquire your first tenant. The number one goal for all landlords is to secure a lawful tenant who honour their duties as a tenant and pay their rent.
Well here are some tips and strategies to save you from a very troublesome and costly experience.
Tip #1: List your rental property on the MLS system
For some landlords, they either want to save on cost and/or do everything themselves, but there are many risks to finding your own tenants and may cost you more money in the long run.
Working with a licensed Realtor that will list your property on MLS market comes with a few advantages:
- Your property will be exposed to the tens of thousands licensed Realtors in Ontario. A lot of which may be working with tenants that will want to rent a property like yours.
- Realtors know that tenants will need their supporting documents when submitting a rental application. Therefore, these tenants are prepared and ready to submit all the proper documents for you and your Realtor to review in detail.
- Most of the time, Realtors will work with tenants that have a realistic and good shot on securing their preferred rental property.
- Saves landlords on time and challenges opposed to sourcing qualified tenants on their own.
In Ontario, the cost for working with a Realtor is 1 month’s rent plus HST. This cost is halved between the listing Realtor who represents the landlord and the co-operating Realtor who represents the tenant.
Although, you can skip the hassle and secure an AAA tenant with a dedicated property manager! While listing services like Kijiji and Facebook Marketplace exist, partnering with a Realtor and leveraging the MLS can attract high-quality renters. But why stop there? A property management company takes it a step further. They’ll handle the entire property leasing process, screen tenants thoroughly, and ensure your property is well-maintained, freeing you to focus on what matters most.
Tip #2: Do the reference checks:
Thoroughly and do not contact the references based on the contact information provided on the rental application – here’s how:
- To be straightforward, you should not trust the phone numbers and names provided on the tenants rental application. Instead, you should research online for the reference’s contact info and get in touch with them from there.
- Employment reference: We suggest you research the tenant’s company online to find its legitimacy. If it’s a well recognized company such as a major bank, contact the main phone line and try to get through to HR or the manager who’s listed as the tenants employment contact. If you’ve never heard or know the company the tenant works for, research the company’s website, Google reviews and social media accounts to verify the legitimacy of the company.
- Landlord reference: If you are working with a Realtor, they will be able to verify if the landlord listed on the prospective tenant’s rental application is in fact the owner of the property they have previously or currently rented from. This is one of the other advantages of working with a Realtor.
Tip #3: The 30% Rule
This rule suggests that the rental price should not exceed more than 30% of the tenant’s monthly gross income. This rule is designed to ensure that tenants maintain a balanced budget, allowing them to manage other essential expenses such as utilities, groceries, transportation, healthcare, etc. Adhering to the 30% rule helps tenants avoid financial strain and the risk of falling behind on payments, fostering long-term financial stability and sustainability in their living arrangements. For landlords, this guideline can serve as a benchmark for assessing the financial viability of prospective tenants, helping to mitigate the risk of rent defaults.
Securing a qualified tenant is crucial for maintaining the financial health and stability of rental properties. Taking the time to thoroughly vet each applicant and diligently review their employment, income and landlord references ensures that landlords select tenants who are reliable and capable of meeting their rental obligations. Working with realtors who have experience with reviewing such applications will support landlords with this process.
The ultimate goal is to protect your investment and following these valuable strategies will help you with a healthy and lawful tenancy. If you or a landlord you know need support with finding AAA tenants, please reach out to us and we will be happy to help with your tenant screening and choosing process management!
