Purchasing a rental property is a little different from buying your new home.
One difference, other than a bit of extra paperwork, is that you may inherit tenants who lived in the unit(s) prior to the sale or you will have to find new tenants to move in. There are legal processes required for vacating a property at the time of purchase (including notice, etc.), but if you choose to start from scratch with new tenants, the search itself can be a little daunting.
Here are some tips to keep in mind when looking for a tenant. As you read them, remember that these steps aren’t just about protecting your own interests but those of your tenant too. Moves can be disruptive, and no one wants to go through the eviction process or small claims court. It benefits both landlord and tenant to build a solid, truthful, and functional relationship.
- Confirm more than just their employment. Many landlords will ask for proof of employment, but it’s important to also ascertain that the income made from this employer will be enough to pay the rent but also meet the other financial needs of the tenant. They might have other commitments like support payments or debt. At the very least, make sure that, at the most, 50 percent of the income of the unit can cover the rent, and more if the tenant will have to pay utilities.
- Find out how long a potential tenant has been at their place of employment. If they’ve just started, find out how long they were at their last position and why they made the change. Surprises, such as a pandemic, can happen, but you can help in the process of not having to worry about a tenant with no job and mode of paying rent.
- Do a credit check to confirm there aren’t any previous debts (especially delinquent) to properties, rental companies, etc. This will help prove to you that your potential tenant is responsible for paying bills and owning up to their debts.
- Do your research when it comes to contact previous landlords. Since the dawn of landlords and tenants, or at least the 60s, potential tenants have gotten around this step in the rental application process by providing false information or asking a friend to stand-in as a landlord. It can be hard to prove, but you can often find out previous addresses through credit checks, searching the title of the given address to see if the landlord’s name matches the owner’s, or even Googling/searching the name on Facebook to confirm.
- Meet the tenants, but always be cautious. Some people can be great at making themselves look perfect. Don’t judge someone based on their appearance either. Have an authentic conversation with a potential client, ask them questions about their interests and job, and always make an educated decision based on research and fact-checking application answers.
Owning a rental property will always come with its own stresses, but it can be a highly rewarding business venture for many investors and entrepreneurs. We’d be happy to provide you with anything you need to ensure your first, or tenth, property purchase go as smoothly as possible.
Interested in finding out if we’re the right agents to represent your purchase or sale of a rental property in Kingston, Ontario? Reach out for a conversation today.