Landlording in Canada is that correct tenant screening means almost everything to the small landlord. Much of this book is dedicated to successful tenant selection and teaching you how to assess a tenancy application. For instance, many of us have heard that “credit checks are a must.” But how do we access credit information? How do we interpret it? Can you simply rely on the credit score? These questions, and many others, will be answered here.
It is one thing to learn the theory behind successful tenant screening and another to put it into practice. To make your learning curve a little less steep, included are sample case study tenant applications based on actual applications I have received as a property manager. You’ll be challenged to find as many problems with the applications as you can, and to make a decision to reject or accept the prospective tenant. Ultimately, you will learn how to make an informed decision without even meeting the applicant face-to-face.
Some inexperienced landlords pick good tenants on their first or second try without any real screening. These landlords may claim their gut feelings led them to make the right decision. In fact, they got lucky. This book shows you how to take luck out of the equation, by systematically evaluating a prospective tenant’s financial qualifications. No tenant screening system is risk-free, but the right system can lower your risk of selecting a bad tenant.
You won’t find chapters and chapters of discussion about subjects such as insurance and bookkeeping here. Maintaining adequate insurance on your rental and keeping good financial records is important, but what is far more important right now is that you learn how to objectively analyze a tenant application in order to minimize your risk. After all, what good is an efficient accounting system when there is zero income coming in because you have a poorly screened tenant not paying rent?
Tenancy laws change constantly, and they can vary quite significantly province-by-province, but this book is applicable to readers across Canada. While it is beyond the scope of the book to outline legal processes specific to every province, you will learn where to find current legal resources relevant to your home province.
This book is further distinguished by its emphasis on ethical landlording. You’ll find advice about applying your landlording knowledge in a way that both protects your interests and remains fair to the tenant.
Ethical landlording is not about granting favours or letting your tenant pay rent late. It’s about building a spirit of trust and cooperation with your tenant by acting in good faith.
Unethical landlords take advantage of their tenants, and their tenants don’t trust them. These landlords frequently struggle with uncooperative tenants, and uncooperative tenants can be costly indeed. Ethical landlording is great for business.
PART 1
BEFORE PLACING THE “FOR RENT” AD
Chapter 1
PREPARING FOR A NEW TENANCY
In this chapter, you will learn to:
• Assess your space before attempting to rent it out; have friends or family provide a second opinion.
• Make sure your property is ready before you advertise it for rent: clean, everything in working order, and all safety issues addressed.
• Renovate your rental property periodically to receive the maximum possible rent, but be careful not to go overboard because not all renovations are worth the money.
• Always bring in professionals to do any work on the property.
• Screen your tradespeople: Anyone you hire should be licensed, bonded, and have liability insurance.
Is Your Rental Ready for Viewing?
Before you start showing the home to prospective tenants, honestly assess the space you’re going to rent out. As you walk through the home, ask yourself, “Would I live here?” If not, then don’t expect a good tenant to live there either. Determine what exactly turns you off, and do something about it!
We all have blind spots about our own properties. Have friends or family members walk through the home with you for a second opinion. Don’t argue with them if you disagree that something needs to be done — they’re probably right.
What are Some Common Basics Tenants Expect out of a Rental?
Trash free
There shouldn’t be a single item of garbage on the property. If the previous tenant left behind a mouldy beer fridge in the garage and a couch in the living room, pay the price to have all junk removed. Otherwise, you’ll annoy or even offend your new tenant. By letting the junk remain, the message you send to the new tenant is, “I’m going to squeeze every last dollar out of your tenancy.”
Clean
Your rental should be in clean, move-in condition. In other words, a spic-and-span, eat-off-the-floor kind of clean. Nobody wants to move into someone else’s dirt. Go through every room in the house and clean all surfaces.
Sweep all floors, then get on your hands and knees and start scrubbing. Vacuuming the carpets is usually not enough. Have carpets professionally steam cleaned or rent a machine to shampoo the carpet yourself. Tenants will expect this to be done as a matter of routine. Have it done before the rental is shown.
Pay particular attention to the kitchen and bathroom(s). All bathroom fixtures (toilet, bathtub, sink) should be sparkling. The kitchen cabinets must be immaculate inside and out. Check for moisture and mould underneath the fridge. The bathroom and kitchen areas must look clean (and smell clean too). No one wants to be reminded of past tenants.
Don’t hesitate to bring in hired help if needed.
Ethical landlording tip: Mould problems? Cleaning and painting may not be enough. Always investigate the cause of the mould and cure the problem at its source. Expect to spend a lot of time and energy dealing with a very unhappy tenant if you perform a Band-Aid fix and then rent a home with mould problems.
Everything working
All windows, doors and closet doors should open and close with ease. All locks must function without a problem. You are legally responsible to provide your tenant with safe and working locks.
All wall switches and wall plugs should work. If they don’t, have an electrician repair them. At the same time, have the electrician certify that the home has been checked for electrical hazards.
Every light bulb should be in working order. Your new tenant shouldn’t need to run to the store for new bulbs on the first day of tenancy.
All appliances must be fully operational. If you need to buy another stove, don’t buy an old used one for $50. Buy a new stove. If the 20-year-old dryer takes three hours to dry clothing, buy a new one.
Old appliances are inefficient,
