A steady rental income keeps every landlord’s blood pressure under control. A rental property is a high-value investment, so they have to ensure maximum return. One of the best ways to maintain a steady cash flow is to find responsible and considerate tenants.
Landlords are sometimes perceived to be hungry for money. However, as businessmen, they naturally intend to keep their business operational. Wanting to have the security of receiving rent each month to pay down their mortgage is not equivalent to greed but a realistic expectation from an investor.
When tenants take care of the property and pay rent on time, it minimizes the risk for a vacancy, cash flow gaps, and damages that require costly repairs.
Those problems lead to the death of many rental businesses. As a rental agent in Canada, you play a vital role in reducing a landlord’s exposure to problem tenants. Let me enumerate some ways you can achieve that.
Your listing must be clear
You may syndicate that listing to other high-traffic websites when you publish a listing on platforms like Padleads. With that high exposure, you should ensure it is clear on your listing that you are looking for good tenants.
Your listing must also indicate that interested tenants need to undergo a criminal background check and credit check and that you would need past references.
It is also efficient to lay down your criteria and rules in the listing (e.g., no smoking allowed, a minimum lease term of one year, etc.). That way, those who cannot adhere to them will not waste their time applying.
By being specific with what you are looking for, the applications you would receive would likely come from good tenants. It deters non-compliant tenants from applying. After all, it is better to have a small volume of high-quality applicants than a hundred questionable ones.
However, when writing a detailed listing, be wary of including terms that may come off as discriminatory. Even if unintentional, you could get in trouble for it. The criteria you set must not discriminate against one’s religion, sexual orientation, race, disability, or any factor cited in equal housing laws.
Competitive Pricing
Good tenants have no issue when it comes to paying rent on time. However, overpriced rental rates are a different story.
If the property set a rental rate way higher than other similar properties in the area, it could put off even the best tenants out there. On the other hand, if the property is priced too low, it may raise doubts.
Reasonable pricing is the key, which means the price must be justified by what the property has to offer and with consideration of the current market rate.
Attractive Curb Appeal
Publish property photos that showcase a neat, tidy, and well-maintained home. Poorly maintained properties will attract lazy tenants who do not like the responsibility of keeping the property clean and habitable.
You want tenants who can handle the responsibility of taking care of the property like it is their home.
Pre-qualify applicants
When a tenant reaches out and expresses interest, pre-qualify them before meeting them in person. Pre-qualifying them would weed out unqualified applicants, saving you time.
A good approach would be to exchange messages through email. That way, you can have written documentation of the exchange. Ask them the following:
- Whether or not they are employed
- Why they are interested in the property and why they are moving
- If they have pets or anything related to the house rules
- What their long-term plans are
- If they are willing to undergo credit and background checks
- If they can give past landlord references
Their answers to those questions would give you an idea of their character as tenants. Ask these details without using any discriminatory terms or questions.
Meet them in person
When you meet pre-qualified applicants in person, be observant. Observe their body language and how they present themselves. Discuss the information they gave you during the pre-qualification process and check for inconsistencies. You can also call their references to verify.
Watch out for red flags. Cut the meeting short if you are uncertain about them. Listen to your gut. Politely let them know that there are other applicants that you are also considering and that you are keeping your options open.
Check their Credit Score
A credit score below 600 is not good and may indicate the tenant’s inability to pay rent. Also, check for a history of bankruptcy and missed payments. These red flags should not be ignored unless you want constant vacancies and cash flow gaps.