Picking the Right Tenant is No Easy Feat
Your tenant can be your best ally or biggest problem, so do your due diligence before signing a lease and choose the right tenant.
Tenant turnover is arguably the single biggest cost for you as a landlord. Whenever a tenant vacates, significant costs are incurred. The cost of vacancy, for example – your property may be vacant for one month or more, impacting cash flow. You will also likely have to pay for some maintenance like applying a fresh coat of paint or repairing damage (especially if the previous tenant was messy or destructive). In addition, you will have to foot the bill for utility payments until a new tenant is found. Considering all of this, the pressure to vet and select the right tenant is real.
Here are some tips to consider when leasing your rental property:
- Good tenants want well-maintained, attractive properties so keep your property(ies) up to snuff to attract the best applicants.
- The best rent is NOT necessarily the best tenant. Sometimes your best bet is someone who may not be able to pay full price but is more likely to stay for a longer period of time so consider this when negotiating. It may be in your long term, best interest to take slightly less rent for a longer period of time negating the cost associated with tenant turnover.
- Check references thoroughly. These calls or emails are crucial to confirming information, establishing trustworthiness and gaining a better understanding of the character of the prospective tenant. A little extra work checking references now can save you countless hours of trying to get rid of a bad tenant later.
When calling previous landlords, besides obvious questions re. payment history, dig a little deeper and ask questions to help you discern what type of lifestyle the tenant leads:
- Was there any damage to the unit?
- Did neighbours ever complain?
- Did landlord return the security deposit to the tenant?
- Would they rent their unit to the person again?
When you call an employer, ask:
- How long the prospective tenant has been employed?
- Verify their income.
- What is their employment status – contract or employee?
- What is their typical work schedule?
Though slightly less reliable due to obvious bias, do call at least one personal reference and ask:
- What is the relation?
- How long have they known the person?
- Describe the tenant’s overall character.
- Run a credit check. This is the best way to determine financial responsibility of a tenant. Don’t consider someone with a score under 600 unless they can provide additional financial documentation like bank statements and employment contracts (low score could be because tenant is new to country and thus, doesn’t really reflect their financial record). Financially secure tenants should score above 700.
- Ask applicants to provide a quick bio in addition to tenancy application.
- Families or households with expectant mothers and pet owners are usually good bets and typically stay longer in one place.
- Be prepared to work with your good tenants to keep them happy so they stay longer.
The Liv Rent App is Here to Help Landlords
If you’re a Vancouver based landlord, you may want to try out our Liv Rent app. There are hundreds of tenants, actively looking for places to rent in the city. But, most importantly, you can lease your rental directly in the app, get a Liv Score (similar to a credit score) on your potential renter, as well as view their detailed bio.