Investing: How to Evaluate Prospective Tenants- Ask Bruce Coleman, Vancouver Mortgage Broker
Canadian Mortgage News
CMI 101 Series
Dreyer Group 101 Series
Financial FYI Series
First Time Buyers
Home Buying 101
How to Evaluate Prospective Tenants
Many home or condo owners in Vancouver will be using a portion of their property or the entire home or condo for the purpose of rental income. This is often popular with people who like to engage in small-time speculation for the purpose of flipping properties for a profit.
Other people rent a portion of their home or condo such as room or basement suite to mitigate their monthly expenses. Whatever the reason, you don’t want to get saddled with the wrong kind of tenant(s) when you are using your home or condo as a rental property.
You want a tenant you can feel confident will pay their rent on time and will treat your property with respect and won’t cause damage or cause other expensive and possibly litigious headaches.
Here are some basic tips to find the most suitable tenants for rental purposes.
If you are looking for a tenant that doesn’t smoke, or you do not want someone who has a pet such as cat or dog then you should be very clear about this in your advertisement. If you only accommodate a single person then stipulate that in your advertisement as well.
Briefly describe what you are renting such as a room, one, two bedroom condo or four bedroom house and number of washrooms for example.
Questions You Can Ask Tenants
There is legislation which protects potential renters from being discriminated against which is known as B.C. Human Rights Act and which includes areas where you cannot refuse them rental accommodation or certain questions that you cannot legally ask. Familiarize yourself with this legislation before you begin the interview process.
Some of the questions which are acceptable include:
• Questions about their current and past employment history and their current income
• You can ask about the number people that will be living with and their names
• You can ask whether they have a pet(s) or if they smoke
• You can ask them to provide written permission to perform a credit check
• You can ask the person to provide the names of references and their contact information
Under the Business Practices and Consumer Protection Act of B.C. you will not be able to obtain a credit report of a prospective tenant unless you have their written permission to do so, and before a credit reporting agency will issue one.
Checks you Should Make
Asides from the credit report, you should do the following to ensure you have the best candidate for your rental accommodation:
• Contact their employer and verify their employment, length of employment and salary. Some provinces have rent check bureaus which you might be able to access for a small fee.
• Contact the previous landlords given in the application and confirm whether the prospective tenant paid their rent on time, and whether there were any complaints made against the tenant for any reason.
• You can also check whether there was any civil action taking against a prospective tenant by checking local court records.
• Ensure that you do contact all their references and ask about the person’s character.
Finally, always go with your gut feeling about a person. If you feel good about the potential renter and you have a good judge of character then go with how you feel.