Posted onJune 05/2015
You’ve recently purchased a rental property. Congratulations! After you’ve fixed it up and turned it into the best housing units available in your neighbourhood, you will need to find the perfect tenants to occupy the space.
Unless one of your friends, relatives or a trusted coworker is looking for housing, attracting great renters isn’t always easy, but when it’s your name on the mortgage, it’s understandable that you want to have your home occupied by responsible people. So how do you find the right tenants for your rental property?
Ask the question: There is one important question you should ask all potential tenants in their initial interview. This question will tell you enough about them that you can separate the good potential renters from those you shouldn’t have living in your housing units.
That question is this: Why are you moving? It’s a simple question that reveals a lot about their needs, their lifestyle, and themselves in general.
Here are a few green-flag answers you should look for:
- I need to be closer to work
- My old place was too small
- My landlord raised my rent immensely and I would’ve stayed had he not
- My old building is being turned into a condo building
- My neighbours were too loud and I need quiet to study/work
Any positive answer is a good indication that this tenant is ideal and will treat the home you’re paying a mortgage on with respect.
On the other hand, if a tenant answer’s the question like any of the following, you should think twice about renting to them:
- I was kicked out of my old place
- I wasn’t getting along with my roommate
- I didn’t get along with my landlord
Be weary of these individuals. Generally people are on their best behavior for tenant interviews, and any negativity will likely be amplified in their day-to-day lives.
Get references: Generally, you will to speak to previous landlords to ensure that you’re getting a model tenant. Furthermore, a letter from the person’s employer will let you know that they have enough income to pay rent each month. Any late payments can in turn make your mortgage payments late, so keep that in mind when evaluating tenant’s salaries.
Don’t be afraid of students: You know who pays for students’ to live outside of their childhood homes most of the time? Their parents! Mom and dad will usually fit the bill for their rent, leaving you with rent paid on time and in full. People tend to shy away from renting to students because they fear they’ll have parties or otherwise damage the home which has become one of their biggest investments. This does happen from time to time, but for the most part students are ideal tenants. If your rental property is in walking distance to a university you are guaranteed a non-stop stream of renters, and as most students take 3-5 years to complete their Bachelor’s degree, which leaves you with a long-term tenant.
Rental properties are great investments and often pay for themselves quicker than expected. If you’re looking to get a mortgage on a rental property, take strong consideration into who you’ll have filling the house. It’s a decision almost as important as who you’ll get your mortgage from, so thoroughly check out all candidates before having one sign on the dotted line.