Landlords: How to Effectively Screen Rental-Property Applicants
One of your primary considerations as a landlord should be to protect your investment. The best ways to do that is by locating tenants who will make timely rental payments and care for your property. However, sometimes, locating such tenants can be a challenge. Occasionally, tenants will manipulate the province’s landlord/tenant rules to cheat landlords out of several months of rent. In addition, some tenants may provide falsified letters of employment, or even create fraudulent and inaccurate credit reports.
As a landlord, it is best to be selective when choosing tenants, and conduct thorough background checks of prospective renters. After all, it’s better to leave one of your units empty for a month than end up renting to a tenant who does not pay, who damages your valuable property, or both. Your property is no longer an income-generator if you’re taking a loss.
The Screening Process:
To achieve the best outcome possible, take your time screening potential tenants. First, create a detailed rental application that includes important questions regarding the prospective tenants’ income and their employer, and be sure to include a section where applicants can provide references. This way, you can call and verify the information the prospective tenants have provided. Also, on the application, request the prospective renters provide letters of employment and ask for permission to run a credit check.
Aside from the above, take time to chat with applicants and ask specific questions about their careers and lifestyle preferences to ensure a good fit. There may be legitimate reasons why an apartment or neighborhood is not suitable for a renter, and it is better to know that up front. For example, if a person has a severe cat allergy and you know the neighbors have cats, you can save everyone a lot of time and trouble, since such an arrangement would not work out long term, and you can shift your focus to finding another individual who would be a good fit for your income property.
Further, be wary of clients who appear too good to be true. Such individuals may have provided you with falsified credit reports. Consider joining your local landlord association and using them as a resource. As a member, you will often receive discounts on credit check services. Such credit checks, provided by third-party companies such as Equifax or TVS, provide financial histories on your potential tenants. This will help you establish if they pay their bills in a timely manner, and will offer information about their rent payment history.
Contacting previous landlords is another way to decide is a tenant if a good fit for your property. You’ll want to ask the landlord questions about the applicant’s character and rent-payment patterns. Also, consider running a criminal background check on potential renters.
Avoid the following with your rental property:
You want to protect your rental property and generate income. Therefore, it is necessary to make an informed decision about to whom you’re renting the property. However, make sure the questions you’re asking do not cross the line. Keep in mind human rights regulations state you may not select or refuse to rent to an individual based on his or her race, place of origin, ethnic origin, religious practices, gender, age, sexual orientation, marital status, family status (i.e. children), or disabilities. Familiarize yourself with your province’s human rights regulations, or contact them for more information if you have questions.
For the most part, prospective tenants are honest people looking for a new home, and want a positive experience with their landlord. Protecting yourself and your interests is important, but refrain from coming across as accusatory or paranoid when requesting background checks (particularly criminal record checks), as most people have no intention of scamming their landlord, and might be offended by such a suggestion.
If you follow the tips above, you will be likely to have a positive, long-term relationship with your tenants.