One of the scariest things about real estate investing is finding the tenant that will cover your carrying costs on your property. This is usually the last step of the entire investing process, so I wanted to give you my tips and tricks on how to find the ideal tenant.
Most Realtors would NOT share this type of info openly with you, but I find that if you know the process (whether you decide to hire our team to find a tenant or not), at least you can arm yourself with knowledge that may result in a better sleep at night.
So here are my tips and tricks on how you can find the perfect tenant:
1) Have a Good-Looking Product.
Most of the time, prospective tenants will find your property through some online channel. As a result, their first impression of the property will be its photos. I always recommend hiring a professional photographer to get it done for you (approx. $100). If you’re a somewhat skilled photographer and have the know-how to edit photos, then you can always try to do it yourself. Remember though, you can always reuse these photos when you’re looking for your next ideal tenant, so having great photos is a worthwhile investment.
2) Good Copy and Advertising.
If you have good copy-writing skills, then this is where it will come in handy. You want your ad to stand out and attract the best tenants. Furthermore, where you advertise is incredibly important. Using a Realtor gives you access to MLS and exposure on Realtor.ca along with many other listing crawler websites. If you do not hire a Realtor, then I would recommend using the following sites and pay for the listing so that it is at the top of the search results:
C) Toronto Rentals
3) Arranging for Tours.
Most people in Toronto live a very busy life. If you are not available for showings, it could be difficult. This is also why a lot of people hire Realtors. However, this is my tip for managing that issue – do all of your showings AT THE SAME TIME. That is key! If you have multiple interested parties going through your property at the same time, then that will make your property look highly coveted! If you followed steps 1 and 2 to a tee, then you will have a ton of interest in your property and your phone will be ringing like crazy. If you’re worried about not picking up all of the calls, then you should set up a call screening program such as RingCentral or Grasshopper to screen calls and give next steps for viewing the property. Alternatively, you can change your voicemail message temporarily to address all of the callers interested in your listing.
Instruct everybody who is interested in your property to submit a rental application and credit check application. This will help provide you with a list of the top prospective tenants that you’re working with. A standard rental application can be found HERE. For credit check, I would recommend using a program called Naborly.
5) Making the Selection
Once you have multiple applications, select your top prospective tenant and have them sign an Ontario Standard Lease form and collect the first and last month’s rent. If you want to add additional clauses, I’ll put OREA’s standard clauses HERE for you. Keep in mind though, any clauses you put will only be as good as how it holds up in the Landlord Tenant Board.
6) Closing Day!
On the day of closing, exchange your keys for all post-dated cheques from your tenant, proof of fire and liability insurance, and utility transfer to the tenant (if your tenant is responsible for their own utilities). Voila! You’ve found the ideal tenant! Rinse and repeat for all of your investment properties.
The Wrap – I hope that sheds some light on the entire tenant selection process. Once you do it once, it is not very difficult (albeit reading this for the first time may sound very overwhelming). That being said, many people still do prefer to hire a Realtor for this whole tenant selection process because one of the worst things that everyone dreads is having a bad tenant in your property. If you are all for sparing yourself of potential future headaches and want to make sure you put the best possible tenant in your property, then give our team a call. We have many years of experience doing exactly what this Insight Article is talking about, and can get your investment property going with an A+ tenant!
Until Next Time, Happy Real Estate-ing,