Rental properties are extremely popular today with homeowners, but for many of these homeowners, it’s the first time that they’ve been landlords. A common and justifiable concern is how to select good tenants, and/or dealing with problems and big expenses should they rent to the wrong people. Here are four things to consider when renting.
Follow the Rules
While you have some leeway in deciding who to rent to, there are laws in place to protect against discrimination, so it’s important to know what they are and understand them so that you don’t accidentally violate them. You cannot discriminate against (potential) tenants based on things like their race, sex, religion, family status, or disability. You should also familiarize yourself with the tenancy act of Ontario.
Why Your Suite?
What is it about your suite that makes it particularly appealing to your prospective tenants? Is it close to their work or school? Is it affordable? Do you allow pets? It’s important to understand why your suite makes sense for your tenants because you want to find someone who will rent from you long-term. Every time that there is tenant turnover, you’ll have to spend time and money finding a new tenant. But if your suite and the prospective tenants are a great match, there’s a higher likelihood that they’ll stay there and save you the headaches of renting the suite out again. Another ‘why’ you should be interested in is why the group of people who want to rent from you are living together – especially if they’re roommates and not a family unit. Do they know each other already and have they lived together before?
Credit Check & Income Verification
You might meet a nice couple who you like, feel like you can trust, and want to rent to but don’t let your emotions get in the way of making an informed decision. Before you sign the lease, you need to do a credit check and verify their incomes. Running a credit check is easy and will allow you to see how timely they are at paying their bills. You should also check their income-to-debt ratio because if they have a significant amount of debt that could affect their ability to pay rent. Verifying their income is also easy – just ask for a copy of their pay stubs and call their employer in order to ensure that what they’ve told you about their employment is true.
The last thing you want is to rent to someone who has a habit of staying six months or a year in different rentals. That’s a big red flag that could mean that they like to move around, that they’ve had problems with their landlords, or that they haven’t paid their rent and been evicted. None of these things are good signs. Ask for references from former landlords and follow up to find out how people who have rented to them previously feel about them. Make sure that they always paid their rent on time, that they didn’t cause damage, and that they gave proper notice to their landlord. The last thing you want is tenants who will cause unnecessary expenses or stress. If the tenants are students who don’t have a rental history, ask their parents to co-sign the lease.
Rent with Confidence
The main idea when renting a suite is to feel confident in your decision. If you follow these general guidelines you will definitely decrease your risks such as late payments, tenant disputes, etc. Renting a suite is a great option for a lot of homeowners, so just be sure of rental history, finances, and that you are also following the rules.