The Secrets of a Landlord – Tenant Selection Plan
Picking the right tenant for your rental property can be as difficult as picking out the perfect chocolate from a box of all kinds that look the same, but taste very different. After all, you could be getting one that looks great on the surface, but is bitter on the inside. Or, you could be looking around the box and skip over one that looks kind of weird, but it’s actually the best chocolate you would ever have had in your life. Tenants are the same way. They can look great on the outside and be friendly to impress you, but they may be the most horrible tenants in reality. It’s tricky business to differentiate the good applicants from the bad ones so we’ve provided you with some pointers below to help you avoid the stress of having difficult tenants.
Construct a Comprehensive Rental Application Form
If you take the time to put together a professional and straightforward application form, you’re going to be able to separate the good applicants from the bad applicants pretty quickly. The application form should ask for the applicant’s legal name, their driver’s license or other government ID number, and their current home address as well as 2 previous home addresses. Here are other items you must have on your application form
Work References
A major part of making sure that your tenant is somebody that you can rely on is by verifying all work references that they give you. Checking in with a work reference will allow you to ensure that the prospective tenant is responsible, whether they may be leaving the position shortly, whether they are still working there, and you can also get a feel of how the employer feels about that person. As an added security measure, we suggest you Google the business and call the reference’s business number vs. a cell phone number given by the tenant so that you can ensure that the business is real and the reference really does work there or if it’s just a “friend” of the prospective tenant.
In addition to work references, ask to see a recent pay stub. You can then avoid the awkward question of asking the reference what the current salary of the applicant is (as they probably won’t/can’t tell you), and you will know if they can afford the rent along with paying for other common monthly expenses.
Landlord references
One of the most important checks that you can do to see if your prospective tenant is responsible is to call previous landlords. Yes, it’s also important to interview the current landlord, but by checking in with past landlords, be it from a couple years ago, or longer, they will be able to speak honestly about their past tenant and tell you of any issues if you ask them about it. Always ask if they would rent to this tenant again and why the tenancy ended, and listen for any pauses, which may be an indication of a red flag.
With the applicant’s current landlord, they may say good things about their tenant simply because they want to get rid of them if they are trouble tenants. So, while checking in with the current landlord is necessary, it’s pertinent to call always talk to past landlords.
Credit Check
In addition to viewing the applicant’s pay stub to see if they can afford the rent, always make sure that your application form has a section that the applicant has to sign to give consent to a credit check. In doing a credit history check, you can verify any other personal information that they give you but most importantly you can see if the person pays their bills on time. If they have extremely bad credit, you will know to pass on this applicant. There is a small cost to conduct a credit check, but it’s a necessary expense to potentially avoid a bad tenant who may have good references. If your investment property is in Canada, whether you’re in BC or Toronto, you can get a credit check with a company called Rent Check for $44.00. www.rentcheckcorp.com.
In Conclusion
Having a comprehensive tenant application form will screen out people who aren’t really interested in your property as they won’t bother filling it out, which means you save yourself time in verifying someone who’s not going to rent from you.
And lastly, no matter how good your gut feeling may be about a prospective tenant, just remember that tenants on the surface are like a chocolate in a box that we spoke of earlier, and by doing the necessary steps above, you get to taste the inside of the chocolate to determine if it’s right for you : )
