2.) What to look for when showing rental property
The first interaction with a tenant provides a great opportunity to gain an impression of them. During the initial showing, the tenant may be more concerned with looking around their new home than acting in a manner consistent with getting their application approved. Some careful observations by the landlord can be extremely useful when considering the tenant’s application.
Here are a few things to look for:
Did the tenants arrive on time?
Tenants who are respectful of their landlord’s time are good tenants to have. Common excuses for showing up late are that the tenant got lost, or was not able to round up family members or kids. Are these seemingly minor excuses reasonable? Probably not. Tenants who do not arrive on time for a showing are not likely to pay their rent on time either. Avoid these tenants at all costs.
Are the children well behaved?
Tenants who want something – in this case, to move into your rental property – are likely to be on their best behaviour. They will speak politely, act respectfully, and maintain a professional manner. Kids, on the other hand, can be cautioned numerous times to behave but have shorter attention spans. Are the kids bouncing around the property in a rambunctious manner? Be sure their behaviour will become much worse when the landlord leaves the premises. If the tenant’s kids are behaving poorly during the showing, expect the property to be returned to you with obvious damage from rambunctious kids.
Did tenant take off their shoes?
If a landlord has to ask the tenant to remove their shoes, this is a good indication that they are not in the habit of doing so. While this may be a personal choice, and can be a cultural issue, tenants who remove their shoes are likely to cause less stress on the flooring of a rental property. Avoid tenants who plan to wear shoes inside their rental property.
What does the back seat of the tenant’s car look like?
This is a tried and true technique for learning whether the prospective renter will keep the rental property clean, or let clutter, dirt and debris build up. Avoid tenants with garbage in their car, as this will mirror the cleanliness of their home.
3.) Verifying information in a rental application
The rental application contains the most comprehensive set of information about the prospective renters and should take the most time to review and confirm.
Renters are extremely unlikely to include information in their application that they know will hinder their chance of having it approved. In addition to thorough follow-up of the details in the application, follow the smell test for your rental tenants. If a landlord happens to smell a skunk hiding in the rental application, then the balance of probabilities suggests there is in fact a skunk hiding there. In practice this means that if a tenant’s information seems too good to be true, it usually is. Ask the following questions:
Does the tenant’s stated income seem unreasonably high?
Look for ways to confirm this income, such as a letter of employment from a reputable business. If the income is from self-employment, ask for a recent tax return to confirm it. Remember: the more intrusive the questioning, the less likelihood of a disaster or massive repair bill from a problematic tenancy.
Is the employer reputable?
A quick Google search to confirm the existence of the company or place of work provided by the tenant should be sufficient. If it does not exist or is extremely difficult to find online, then it is likely to have been made up. If the tenant claims to be self-employed, ask for a business card or marketing/promotional materials to prove the company’s existence. If it cannot be confirmed, decline the tenant’s application.
Are there gaps in the tenant’s rental history?
If a tenant’s application lacks previous landlord information for a period of time (typically six or 12 months), they may be trying to hide a less than positive past tenancy. If they refuse to provide comprehensive chronological information for the past two years, ask where they lived during the missing time. A backpacking trip overseas or living with parents are acceptable responses; disclosure of a problematic tenancy followed by court eviction is not an acceptable response.
Ask the current referees if they can provide names and contact information for other referees
Following these strategies will help you weed out undesirable applicants and greatly reduce, if not eliminate, the likelihood of a rental catastrophe.
From Canadian Real Estate Wealth Magazine, a monthly publication focused on building value through property investment, covering topics such as values and trends, mortgages, investment strategies, surveys of regional markets and general tips for buyers and sellers.