How To Secure Long Term Tenants For Your Toronto Condo?
Sunday Aug 02nd, 2020Share
So, you’ve heard that renting out a condo is like hitting two birds with one stone – renting out your condo helps you make living on the side, while tenants help you pay out mortgage with monthly rental payments. Sounds like a great opportunity for profit, but unfortunately, things aren’t as simple as they seem!
First of all, there are tons of risks associated with tenants. Ideally, you would want good people to occupy the space you own, who take good care of your property, pay the rent on time, and most importantly, become long-term residents. Tenant selection shouldn’t be an arbitrary decision, but it can be a daunting task when you have a long list of applicants, especially if you are a first-time landlord. If you are having difficulty security the right tenants for your property, we are here to help you out!
Make Sure Your Tenant is Employed
This is extremely vital if a lot depends on your monthly rental income. You need to ensure that your tenant is able to pay their rent on a consistent basis, and ideally on time. The most solid proof of their employment is to ask them to acquire a letter from their place of employment, including proof of employment at the establishment and verification that they are getting paid at that organization. This would help you rest assured knowing that they will not miss out on rent from time to time and save you a great deal of trouble down the road. Frequent evictions cut down the return of your investment and give you a bad reputation with tenants on the market, not to mention, who has time to find new tenants every so often. This is why ascertaining the reliability of your tenant should be a critical part of your selection process.
Tip: Look for a tenant whose monthly income is at least three times the monthly rent. You can call up their employer directly to confirm their employment status, monthly earnings, and length of service, for your peace of mind.
Inspect Their Credit
It’s one thing to be employed at a reputable organization, but if your tenant neglects to make other payments, it should be a red flag. Who knows when they start doing the same on your rental payments. A tenant’s credit score speaks volumes about the types of financial commitments they have, and how well they fulfill their commitments. Especially if you are a first-time landlord, we would advise you to thoroughly inspect your credit bureau report to get an idea of how a prospective tenant treats existing financial obligations. This will help you decide whether to rent out your condo to them or not. If they are responsible with paying their bills, there is a strong chance they will pay their rent on time and be responsible with your apartment. A credible real estate agency will make this process easier for you, alleviating you of the need to manage and credit check each individual tenant by yourself.
Find Out Their Background
In addition to financial responsibility, getting feedback from their family members, colleagues, friends, and especially past landlords (if any) can give you a better idea about a prospective tenant. Through a first-hand account of those who have dealt with them in the past, you will be in a better position to make a decision.
It’s prudent to double check all the contact information of the tenant’s references and reach out to their previous landlord(s) to get an idea of what kind of tenants they are. Ask whether the tenant paid their rent on time, if they gave a 30 days' notice prior to moving, if they complained about everything, the condition in which they left the previous property, how they maintained the property for their length of tenancy, and if they caused any damage to the property other than normal wear and tear.
Choose A Tenant Who Is Stable
Be sure to scrutinize the employment history and the prior addresses of prospective tenants on their application forms. If they seem to switch jobs and houses all too often, this pattern is unlikely to alter and you will soon have a vacancy on your hands again. Additionally, if their employment history seem shaky or doubtful, they may not be able to afford the apartment in a few months’ time when they leave their job again! You don’t want to face an eviction that soon!
Nurture Tenant-Landlord Relationship
Finally, establishing an amiable tenant-landlord relationship is critical to making sure that you have secured a tenant who will stick around for long. After all, letting a stranger live on your property is a big deal, and you need to nurture trust to establish good relationships. If you have to compromise a little every now and then, learn to live with it. You will be negotiating throughout the terms of the contract, so you better learn to do so in a friendly and healthy manner. Being a landlord requires commitment, and the art of dealing with people.