Every landlord wants to find a great tenant who will respect their property, keep it clean and free from damage, and pay rent on time. A balanced and fair relationship between landlord and tenant can reduce stress, and make for a happier and healthier experience for both. However, the process of finding those great tenants isn’t quite as clear as many might think.
To find a truly good tenant, landlords need to use a combination of checks and balances, while also trusting their gut. Over-reliance on any one of these can lead to disaster, so it’s best to approach the tenant selection process by relying on a mixture of pragmatism and intuition. Here’s a few tips on how to achieve that.
CHECK THEIR RECORDS
As the old saying goes, “the proof is in the pudding.” When it comes to tenants, that comes in the form of background checks, credit checks, and referrals from previous landlords, all of which paint a picture as to who that tenant is. The results will speak for themselves, and if a tenant gets glowing reviews from the credit spectrum, right up to the landlord referral, chances are they’re a good fit.
That’s not always etched in stone, however. People change over time, either by circumstance or life experience, and not all tenants who start with a AAA record finish with the same result. It’s fine to have records and credit checks dating back a number of years, but pay close attention to the most recent entries. For instance, if a tenant had stellar credit for years, but shows signs of slippage in the modern era, it could be a sign that something has changed. Credit scores can fluctuate, but they should still remain in healthy territory. Sharp dips in their score can indicate poor purchasing decisions, a debt saddle, or employment problems.
Referrals require a bit of intuition. If you aren’t sure whether a referral is legit, try reaching out to the previous landlord over a phone call, and ask them detailed questions they may not have prepared for. Their answers will dictate whether they’re being honest about the tenant, or not. For instance, if a tenant has rented from a friend or family member in the past, their referral will most certainly be biased in their favor, which is hardly enough information to go on.
CRIMINAL BACKGROUND CHECKS
The last thing any landlord wants is a criminal living on their property. Therefore, it’s important to make sure that tenants have a clean record. That being said, sometimes people make mistakes in life, and it’s unfair to penalize a tenant for something they did a decade in the past. Many who make such mistakes attempt to course correct and get their lives back on track, and landlords can help in that regard.
However, if a tenant has a recent criminal conviction for, say, drug trafficking, it could be an issue. Your property could be used for anything from a drug den, to a dealer hangout. If the law is forced to step in, you could become pulled into some uncomfortable legal entanglements best left avoided. Bear in mind that you do have the right as a landlord to request a criminal background check, but the process requires permission, and can be lengthy.
Choosing a tenant with a criminal background requires a bit of intuition on the part of the landlord, and it’s best to trust your feelings. If you’re uncomfortable with such a tenant living on your property, you have every right to choose a tenant with a clean record.
INCOME AND DEPOSIT
Naturally, a tenant’s ability to pay rent depends on their level of income. This will factor into a credit check as well. For instance, a tenant with an outstanding debt-to-income ratio will be penalized with a lower credit score. However, a good credit score is not necessarily indicative of their earnings in the here and now. One can be unemployed and still retain a great credit score, which makes them unsuitable for tenancy.
Second, it’s never a good idea to take the tenant’s word for it when they provide you with a salary number. You can ask for a T4, bank receipt, record of employment, or a pay stub to verify that the tenant is being honest and upfront. Once you have a confirmed number to work off of, you can quickly calculate whether the tenant will be able to afford the rent you’re asking. Generally, tenants should set aside 30% percent of their monthly income to pay for rent, so bear this in mind.
Failure to check a tenant’s salary can lead to massive headaches, especially if they simply decide not to pay rent. Once that happens, the process of eviction can be lengthy, costly and time-consuming. Better to avoid the headaches before the tenant starts moving in.
They say “never judge a book by its cover,” but it’s also said that “you never get a second chance to make a great first impression.” Keep both of these philosophies in mind when judging a potential tenant. They may dress, look or act differently than you do, but that doesn’t mean they won’t be fantastic tenants who will look after your property, pay on time, and give you no hassle.
Alternatively, you can, and should judge other tenants based on specific criteria. Do they reek of cigarette smoke? If so, will they abide by your no-smoking policies? Are they rude and inconsiderate? If so, that may translate to unruly behavior that will annoy the neighbors, or create friction between yourself and the tenant. Human beings judge each other subconsciously, and landlords need to exercise both subjectivity and objectivity when deciding whether to green-light someone for tenancy.
The process of selecting tenants is not easy, but you can avoid a lot of issues and pitfalls, simply by adhering to the criteria mentioned above. That being said, even the most clever landlords can still miss a few cues, and end up choosing a bad tenant in the process.
Here at RentCore, we understand the process of selecting tenants better than anyone, and we have years of experience that gives us a unique edge. If you’re having trouble deciding on the right tenant, or you’re ready to begin the rental process and don’t know how to start, we’re always available to assist. Hiring a property management company like RentCore will give you peace of mind from the beginning of a rental contract, straight through to the end. Contact us today!
Eventually, kids grow up and go off to college. It’s a natural progression for them, and they’re going to need a place to stay while they’re getting a higher education. While a lot of students may opt for the traditional dorm room, others prefer to live off campus so they can concentrate better.
For landlords, this can be a boon, but there are some things to consider before you decide to rent your property to a student. Risky tenants come in many forms, and students are no different. If you’re going to entrust your property to them, you should know what to watch out for.
THE GOOD: PLENTY OF TENANTS TO CHOOSE FROM
If your property is located near a college or university, you’re in luck. Every year, new generations of kids are leaving home – many for the first time – and pursuing higher education. That means your property is in a prime rental location, and many students would undoubtedly be happy to rent it.
In fact, one of the greatest benefits of renting to students is the “turnover guarantee.” Once a student has completed their studies, they’ll move out and make room for another student to move right on in. If handled correctly, you can guarantee a steady revenue stream for years, if not decades.
THE BAD: LACK OF CREDIT HISTORY
Young people lack credit; that’s just a fact. Unless they started working at a very young age and penny-pinched their way into a 700+ credit score range, chances are they won’t have anything in the way of established credit or collateral. However, with no opportunities to build a credit score, many young people become stuck in a financial rut.
If your tenant has a good history, no criminal violations, and is backed by a co-signer, such as a parent, it may be beneficial to rent your property to them. Your rent should be guaranteed, while the student can build up a solid credit rating in the process. If the worst does occur, and a student needs to leave, chances are you will find another to take their place.
THE GOOD: HIGHER RENTAL FEES
Supply and demand is a reality when it comes to any area of economics, and renting real estate is no different. If your house is situated close to a college or university, chances are it’s not too far from other attractive amenities and services, as well. With everything centralized in one key area, the attractiveness of your property shoots up dramatically.
That means you are justified in charging higher-than-average rent. Doubtlessly there will be many students competing to rent your property. All you need to do is decide which one is the best candidate, and watch the money roll in.
THE BAD: IMMATURE BEHAVIOUR
College students may technically be adults, but they have a long way to go before they’re considered grownups. The pursuit of higher education also includes drunkenness, hedonism and rowdy parties, all of which can spell trouble for your property. If you are going to rent out to a tenant, you run the risk of such behaviour taking place.
Even if you have a no-party rule stipulated in the contract, some college students may still participate in heavy drinking, drug use or other behaviour that they believe will go unnoticed. Make sure to lay down the law early on, and schedule regular inspections to make sure nothing nefarious is going on inside the walls of your property.
THE GOOD: STUDENTS AREN’T FUSSY
Students are so thankful to strike out on their own that they probably won’t care much about anything else. While it’s always a good idea to maintain your property, renting to a student usually means that non-vital upgrades and repairs don’t have to be prioritized. That means skipping luxurious kitchen and bath upgrades, and keeping things as they are for the time being.
Over time, you may wish to upgrade your property, but there’s no sense investing money into something that isn’t necessary at that moment. Students will spend a significant amount of time either studying, or sleeping. When they’re not doing either of those, they’re out on the town with their friends.
THE BAD: THEY MAY BE LAZY
Many kids grew up with mom and dad taking care of everything, from the laundry, to lawn mowing, and that can become a problem when they finally move out. Some student tenants are so used to living the cushy life under their parents’ roof that they may not be able to grasp the most basic of property maintenance rules.
This can manifest itself in everything from noise complaints and icy porches, to vermin infestations. Be prepared to draft a contract which lays out the rules in a clear and explicit manner, and make sure to schedule regular inspections to make sure they’re upholding their promise. Otherwise, irresponsible tenants can make short work of your property, which can cost thousands of dollars to fix.
If you’re interested in making a lot of money by renting out your property to a student, make sure to look at all the details. Otherwise, consider offloading the responsibility onto a property management company. RentCore has a lot of experience renting properties to student tenants, and we know exactly what to look for when it comes to choosing the right one, and making sure they abide by the rules.
For more information on how RentCore can help you achieve a stress-free rental experience, contact us today!
Eventually, most people move. It’s just a common fact of life, and it pertains to the property rental market as much as it does people who own their own houses. Tenants who rent properties tend to stay for at least a few years, but there’s no guarantee they’ll stay for the long haul. Many move out so they can find a property closer to their job, cut down on travel times, or deal with a change of life such as a marriage, divorce, or the birth of a child.
That being said, you as a landlord depend on filling your property’s vacancy to maintain your cash flow, and lease renewals are a big part of that. Whether you’re renewing the lease of a tenant willing to stick around for a bit longer, or replacing said tenant with another prospect, it pays to follow some simple tips.
Depending on the length of your contract with a tenant, you should give ample notice of a lease renewal so that both parties understand what’s happening. Alternatively, you can opt for an automatic renewal of the lease if stated in the original contract. Typically, these kinds of automatic or manual renewals eschew the standard 1 or 2-year tenancy obligation in favor of a month-to-month rental contract.
If this is the case, it’s important to guard yourself against sudden vacancies. Tenants need to provide 60 days notice minimum before the lease expires if they wish to renew the contract, and both parties agree. Similarly, they must give 60 days notice if they intend to vacate the property before the one-year lease expires.
If either tenant or landlord is not satisfied with the conditions of a lease renewal, ample notice should always be given in writing. You as a landlord cannot enforce a renewal without the express consent of the tenant, and that includes their signature on the contract as well. If you’d rather forego a lease renewal option, a month-to-month tenancy schedule can be applied, provided the tenant agrees to give 60 days notice before vacating.
If a lease renewal coincides with a justified increase in rental fees, landlords should approach this topic carefully, and with sensitivity. Rates increases may be applied every 12 months based on the allowable limit set by the Ministry of Housing. All rent increase notices must be delivered to the tenant 90 days before they go into effect, and must be done in writing using proper forms. This does not apply to residential buildings, houses or condos built after 2018. In those cases, landlords can increase the rent every 12 months with no cap, provided there is 90 days notice given..
Regardless of what you decide, tenants should be informed as soon as possible about your decision. Most tenants are fine with a modest and acceptable rental fee increase, but a massive spike based on rising property or rental rates could prove to be a shock to the system. Notice must always be given so that tenants can make informed decisions. This gives them time to decide whether to stay or move, which will give the landlord ample time to find a replacement tenant. When in doubt, give factual and fair justifications for a rent increase to your tenant.
ANTICIPATE TENANT REQUESTS
Lease renewals don’t always operate one-sidedly. In fact, many tenants may wish to renegotiate their leases when the old one has run its course. This also includes the option for tenants to exercise their automatic renewal clause. In this case, never assume.
When renegotiating a lease renewal with a tenant, always ask the following:
Do I want to keep my existing tenant?
What are my limits within the legal framework?
What are the local and national vacancy rates?
Should I offer upgrades and perks for my existing tenants to get them to stay?
Make sure to perform all applicable research, while trusting your gut. Good tenants can be hard to find on your own. If you’re working with a property management company, you will have greater flexibility when deciding on tenant demands and requests during a lease renewal. Otherwise, you’ll have to take a risk.
YOUR REPUTATION WILL AFFECT A LEASE RENEWAL
If you’ve been a courteous, firm, but fair landlord who has garnered a great relationship with your tenant, you will have options when it comes to lease renewals. Oftentimes, a departing tenant may go to bat on your behalf, and start advertising the vacancy to their friends, family and coworkers. This is a social networking advantage that is totally free for you to enjoy.
If you’ve handled yourself admirably during the existing lease term by providing prompt tenant support for things like complaints, repairs and maintenance, you’re well on your way. Being a landlord means having a relationship with your tenant where both view your property as their own home. That’s the ideal situation, and it will pay dividends when the issue of renewal pops up.
Lease renewals don’t have to be a scary scenario. By following the above tips, you can renegotiate with tenants, or part ways on excellent terms without suffering a prolonged vacancy. This offers greater peace of mind, and a smoother property rental experience as a whole.
To make the process of lease renewals even easier, consider working with a property management company like RentCore. Not only will we navigate the intricacies of lease renewals, but we’ll also help find the best prospective new tenants, while keeping tabs on all the duties associated with being a landlord, so you don’t have to. Contact us today for more information.
Many would-be landlords interested in renting out their properties may struggle to figure out exactly what kinds of fees they can expect to be charged by a property management company. There is no defining set dollar amount, but rather, a series of variables that determine the final cost of the service.
Rest assured, the benefits of a property management company are worth every penny, especially for those who may not realize just how competitive and affordable their services are. However, it’s good to know how property management companies calculate their fees before deciding to work with one to rent out your property.
AVERAGE PROPERTY MANAGEMENT FEES
Depending on the nature of your property, your needs and location, and even the number of tenants renting out your space, a property management company will charge an affordable rate in exchange for great service. The typical range of fees is between 6% to 12% of the rental value of the property, which pertains largely to landlords charging mid to high-level rents. Often, a property management company will swap this for a flat fee in order to manage properties with a lower rental value.
Landlords may also own multi-unit properties with many different tenants, and a property management company may simply decide to charge a flat rate to manage all of them simultaneously, as opposed to variable rates per tenant. This is done largely for the convenience of both parties involved, and helps maintain smoothness and consistency of service.
Certain property management companies may charge marginal fees for extra services required only once in a while. These can include everything from finding and placing new tenants, to evictions and maintenance charges. Similarly, extra fees may be incurred when advertising your space to potential tenants, as this takes time and money.
These are considered standard fare, and of no real surprise, but landlords should be aware of anomalies that may arise in the rental process. One of these instances is the act of evicting a bad tenant, which is costly and time-consuming. A property management company can handle this problem much better than most, but charges may be billed for legal processes, notably in pursuit of a court eviction order, which can cost up to $2,600 on average in Ontario.
A good property management company knows the value of working with landlords to draft up the right package of services, for the best cost. There are lots of factors that both parties should talk over in order to come up with a mutually agreed price, but landlords should be aware that it’s usually standard practice for the property management company to charge for a flat range of services.
Outside of these basic services, landlords can pick and choose from a variety of ancillary services that are customized for their benefit. This can help save time, money and headaches, all for a nominal and acceptable rise in fees. When in doubt, always ask. Property management is all about the relationship between the company, the landlord and their tenant(s), and the better that relationship is, the happier everyone will be.
Setup fees are not uncommon when dealing with a property management company, and these tend to be upfront when the account is first created. This is largely administrative in nature, and designed to save time and money later on. By setting up your account properly, a property management company is ready to represent you, so that you can immediately shift your focus to other things.
BANG FOR THE BUCK
If you’re a landlord reading this for the first time, you’re undoubtedly surprised by how affordable and straightforward property management fees are. This is good news, as it can help make your decision that much easier. In return for the modest fees charged each month, property management companies deliver a wealth of services that can give you fantastic peace of mind.
Remember what a property management company brings to the table in terms of value – the knowledge and experience necessary to seek out and locate excellent and reliable tenants, shorter property vacancy cycles, less expensive legal complications and hassles, a robust rent collection process, etc. When added up, this presents an incredible level of value, especially for landlords who want to focus on their career, family or personal health.
Now that you understand the variables surrounding property management fees, you’re better equipped to know what to expect as you move forward. Here at RentCore, we’ve always prided ourselves on our ability to work with landlords with properties of all types, and flexibility is a key component of our strategy.
If you’re interested in renting out your property, but you don’t have the time to focus on managing it, we can help. We’d like to hear from you so that we can determine the best range of services to offer you. Contact us today!
Both landlords and realtors face a challenge when it comes to renting out properties to prospective tenants. It’s a time-consuming process to select the best candidates who are responsible and will pay on time, while respecting the property, and handling things like maintenance and repairs. For that reason, many opt for the services of a property management company that can take the load off. This is especially relevant for those who have multiple properties and growing real estate portfolios that need managing.
Finding the right property management company means examining your personal needs as a landlord or realtor, first and foremost. From there, it’s a matter of checking out various property management companies to see how much experience they have, as well as their track record of success. RentCore prides itself on being a top-level property management company serving the Greater Toronto Area, and we know the criteria necessary for success and client satisfaction. Read on to learn more.
IDENTIFY YOUR OWN NEEDS
Before you can begin to find a good property management company, you must first identify your needs. Are you an ambitious entrepreneur with very little time on your hands? Do you want a better work/life balance? Are you interested in a “set it and forget it” approach to renting out your properties for the sake of peace of mind? There are many factors to consider before you begin your search for the right company. It’s also important to identify any challenges and issues you’re facing with your current property management company, if you have one. Don’t stick with your current company out of convenience, or it may cost you in the long run. Instead, be prepared to switch companies in order to take advantage of better and more robust services, not to mention greater professionalism and results.
CHOOSE A LOCAL COMPANY
When searching for a property management company, it’s wise to choose one residing in the area of your property. Local companies already know the various real estate bylaws, not to mention trends that can affect everything from marketing, to tenant selection. Moreover, local property management companies have undoubtedly established ties with various businesses in the area, many of which provide repair and maintenance services at good rates. When it comes time to put your property up for rent, a good property management company will maximize exposure, simplify the process, and guarantee a seamless experience for the long term.
ASK ABOUT SERVICES
It’s important to choose a property management company with a solid list of helpful services that can take the stress and grind out of your daily routine. A good company knows how to handle all marketing and advertising for your property, as well as tenant selection, the drafting of contracts, and things like regular inspections. They’ll also handle rent collection, including tenants who are in arrears, while providing transparent and straightforward accounting and reporting records. A property management company should keep track of regular maintenance on your property, as well as any necessary repairs. And finally, 24/7 on-call emergency contact information is a must to guarantee peace of mind and platinum-level service.
DO YOUR HOMEWORK
The online world is a great place to learn more about any company, and it’s easy to find Google reviews, Facebook comments and other social media content that can shed more light into how a property management company runs. The best companies know the value of transparency, and they will strive to present themselves as human beings who are willing to treat you the same, as opposed to just another number. Service is a number one priority for great property management companies, which means it will inevitably show in client reviews. Analyze what they have to say, including any potential criticism, and whether the property management company responded to it in a professional and constructive manner. And of course, when in doubt, it’s always handy to check the Better Business Bureau to see if a property management company is virtuous and honest.
TRACK THEIR WORK
If you’ve decided to go with a particular property management company, you are now in a position to see if they are able to live up to their reputation. Great property management companies know the value of transparency when it comes to showing their work, which means regular reports that clients can easily decipher and digest. Most use advanced software suites to keep tabs on every element of the property management process, especially as they grow in size and stature. By accessing regular reports generated from their software suites, landlords and realtors can keep an eye on real-time results, month-per-month. This is very advantageous and convenient, as it allows for better record keeping, and a stronger sense of how your property – or properties – are faring in the rental market.
If you’re in need of a property management company that understands your needs, concerns and real estate goals, we recommend getting in touch with RentCore today. We’d like to hear your story so that we can determine how best to service your property needs.