How to Find the Right Tenants

Finding the right tenant or tenants for your investment property is essential for maintaining steady rental income and minimizing issues. It involves thorough screening while following anti-discrimination laws.

What Can You Ask Prospective Tenants?

Consult a legal professional or landlord association to get informed about relevant rental laws and best practices. Questions you can ask include:

• Name, address and date of birth, as necessary for credit checks
• Details from their passport or driver’s license to confirm identity
• Past renting experience (however, a lack of rental history cannot be a reason for rejection)
• Permission to run credit checks and access credit references
• Source of income and expenses to assess financial stability
• Specific questions like:
  • What is your income?
  • Are you employed? Where do you work?
  • Who will live with you? What are their names?

What Topics and Questions Do You Need to Avoid?

• Personal Identifiers:
  • Social insurance number (SIN)
  • Age
  • Country of origin
  • Religion
  • Gender expression
  • Family status
• Protected characteristics:
  • Disabilities
  • Sexual orientation
  • Pregnancy status or whether they have children
  • Marital status
• Financial assistance:
  • If they are on social assistance
• Dispute history:
  • If they have ever been involved in a dispute
• Lifestyle choices
  • Whether they smoke (Instead, specify if the property is non-smoking in the lease agreement)

Who Is Your Ideal Tenant?

• Before you list your rental property, take time to consider what characteristics your ideal tenant would have and what restrictions you wish to impose. Clarifying these details in advance ensures a smoother, more effective, process.
• Key aspects to consider include:
  • Minimum income requirements
  • Whether a guarantor is needed if the income is below a certain level
  • Preferred consistency and length of previous renting experiences
  • Desired move-in date and rental period (short-term or long-term)
  • Quality of references from employers and previous landlords
  • Your policy on pets and smoking
  • Type of tenants, such as professionals, students, or families, while ensuring non-discriminatory practices

Clarify Your Criteria in the Rental Listing

• Create a clear and concise listing to attract qualified tenants, highlighting key information so that your ideal tenants are more likely to notice and be interested.
• Position the most crucial information prominently.
• Be clear on any requirements, such as a pet-free or smoke-free environment.

Pre-Screen Potential Tenants Thoroughly

• Have a set pre-screening process and develop a comprehensive pre-screening questionnaire. This helps clarify whether a potential tenant is qualified enough to be considered further.

In-Person Meeting and Viewing

• Meet potential tenants in person to evaluate them thoroughly and allow them to see the property.
• You can answer their questions, gauge their active interest and take advantage of another opportunity for screening.

Send Out Application Forms

The application process provides deeper insights into potential tenants.

• Collect Essential Information:
  • Request details on rental history, income, references, and credit scores, within legal limits.
• Evaluate Applicant Behaviour:
  • Note their promptness, eagerness, and communication, which can indicate reliability.

Verify Applicant Identity and Information

• Take the time to ensure all provided information is accurate and legitimate.
• Verify identification, employment status, and income, and perform thorough credit checks.
• Contact previous landlords to verify rental history.
• Consider conducting a criminal background check for additional assurance.

Assess Rent Affordability

• Determine if the tenant can comfortably afford the rent.
  • Confirm their rent-to-income ratio, and follow the guideline that rent should not exceed 35% of the tenant’s gross income to ensure affordability.

Tenant Screening Tips 

• Screen co-applicants and all adults who will live in the property to avoid risks from unscreened individuals.
• Apply uniform standards to all applicants to avoid bias and ensure fairness; consistency also simplifies the screening process and helps avoid legal issues.
• Use comprehensive and standardized application forms and questions to ensure you gather consistent and relevant information.
• Keep detailed, organized, and secure records of all applications, communications and decisions made during the tenant selection process, to protect yourself in case of disputes and provide a clear audit trail of your decision-making process.

These steps can help you find reliable tenants for a steady rental income.