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, only for the purpose of a credit check
• 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:
  • 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.

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

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.

Verify Applicant Identity and Information

Always 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

There are some key best practices to follow, to ensure both fairness and legal protection. 

Screen all co-applicants and adults who will reside in the property to mitigate risks associated with unscreened individuals. Apply uniform standards to every applicant to promote fairness, prevent bias and ensure legal compliance; maintaining consistency in your approach also streamlines the screening process. Use comprehensive, standardized application forms and questions to collect consistent, relevant information from all prospective tenants. 

Additionally, keep detailed, organized and securely stored records of all applications, communications and selection decisions to protect yourself in the event of disputes, and to maintain a clear audit trail that supports your decision-making process.

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

Help from a Trusted Partner

Making the decision to invest in real estate is significant and requires thorough planning. The guidance of experienced professionals can be invaluable. RLP InvestorsEdge™ is a real estate investment platform by Royal LePage® dedicated to serving Canada’s residential real estate investors. Agents are trained through an exclusive and comprehensive Masterclass Series designed by Broker’s Playbook™, to offer unmatched market insights using cutting-edge tools to deliver comprehensive analysis and tailored advice.

Ongoing support is provided throughout every phase of the process, from the early stages of a property search and finding tenants, to sale and management. Their unmatched negotiation skills and marketing strategies can help investors achieve better purchase terms and stay competitive in the market. Investors also gain an advantage with exclusive access to early listings at rlpinvestorsedge.ca. Whether you’re new to investing or managing a large portfolio, investors of all experience levels and budgets can benefit from working with a trained RLP InvestorsEdge™ expert.