At Central Erin Property Management we have a lot of experience choosing tenants. Whether you’ve never selected a tenant before, or have filled more apartments than you can count, there’s always room to refine the process and make better judgments. After all, choosing a tenant is a critical skill. Picking a stable, financially secure person will ensure your property remains full and safe for the term of the lease. Here are our tips on how you can choose your next tenant with confidence.
Check Income & Debt
You want to ensure that a tenant can afford to rent your property. The general rule is to look for a tenant whose monthly income is three times the monthly rent. This gives the tenant a comfortable cushion of income on which they can live.
However, that’s not the only thing to consider. If a tenant has a considerable debt, they may still not be able to afford the rent. Alternatively, if a tenant doesn’t quite make three times the rent, but doesn’t have any debt, they might be a better tenant than someone who has more debt.
Ultimately, if you don’t find a prospective tenant who can reasonably afford the rent, it may be best to leave the spot vacant for another month in order to find a more stable tenant.
Run a Credit Check
Just because someone can afford to pay rent, doesn’t mean they will reliably pay it every month. A credit check will let you know if your prospective tenant pays their bills regularly. Someone who has less than perfect credit can prove that they’ll be reliable by offering a credit reference. If you have to choose between several people with middling credit, it’s wise to ask each for a credit reference to help you make your choice.
In the course of showing the unit or property to the prospective tenants you have the chance to ask them questions and gauge their suitability for the property. You may consider asking them:
Why they are moving from their current home
What they think of their last landlord
If they had any trouble paying their previous rent
What they thought of their last neighbours
It’s perfectly fine to make small talk with tenants, but don’t make your decision based on any irrelevant information you learn about them. This may include their age, race, gender, sexuality, or other legally protected categories. There are strict laws in Ontario preventing landlords from discriminating between tenants for these reasons.
Trust Your Instincts
You get better at reading people the more you select tenants. Experience will teach you when to listen to red flags, or when to give people a chance who appear like below-average tenants on paper.
Bad Luck Choosing Tenants?
It can be a hassle to try to fill your vacancies. If you’ve had a string of bad luck, it may be time to turn the reins over to someone else. Central Erin Property Management has the experience to take care of all of your property management needs, including finding just the right tenants. Contact us for a property management proposal today.