Wednesday 4 September 2013

How landlords can steer clear of bad tenants

Real estate investing is becoming increasingly popular, and can be extremely lucrative. Purchasing a property and having tenants pay the mortgage can be a great way to invest. However, one of the main reasons potential landlords leave the business is by making the mistake of renting to a bad tenant. Finding good tenants is key to making your rental business work, and fortunately, there are simple methods to screen potential candidates that can minimize the chances of selecting the wrong ones.

The first step to finding a good tenant is a detailed rental application. These forms can be found online and easily completed. A good application should include the applicant's job, the name of their supervisor, income, current address, references and referral source (if applicable), government issued identification, and any other details you feel will be relevant to the approval process. Not only does this document give a landlord a snapshot of their potential candidate, it gives helpful information for a landlord to track the tenant down if need be.

Once a tenant is chosen, a move-in inspection report is a must. This document is often neglected, but can prove extremely useful. By conducting a thorough inspection with the tenant upon move-in, any damage when the tenant vacates is clear. Most provinces require this document, which must be shown before any funds are deducted from a security deposit.

Finally, a residential tenancy agreement must be filled in and signed. The tenancy agreement contains names, addresses, rental amount and all other pertinent information. Addendums can be made to the document for additional guidelines such as allowing or disallowing pets, smoking or penalties for late payments.

For more tips to help landlords find exceptional tenants, read the full article here.