How Important are References?

As landlords, we skimp out on the incredibly important screening process all too often. This is never wise, and I’ll be the first to preach to you about just how important this process is. Skimping out will increase the likelihood of you ending up with a tenant from hell, who will give you nothing but headache, heartache, and most of all, wallet-ache. Professional debtors, as many like to refer to them, do exist, and they will squeeze you for everything they can. In fact, many landlords would argue that the board favors tenants. With the processes, and time required to successfully evict, it’s much wiser to do your due diligence right from the start.

References are quite possibly the most important aspect of the screening process; who better to provide insights on a tenant than the tenants past landlords? With that said, it’s shockingly frightening just how many landlords fail to properly follow up with the references provided by their potential tenants. Being the head of CMG Toronto, I handle a wealth of landlord properties, so I see it firsthand. In fact, this month alone we’ve had 5 tenants move out to new properties. Not one of their future landlords contacted us for a reference. This shocks me.

Your rental property is your investment, and you should protect it. A bad tenant can cause thousands of dollars in damages, and guess who will be left to pick up the bill? It won’t be the tenant. They’ll have moved on to a new property, and you’ll be left to pick up the pieces. This just may be enough for you to leave the landlord game for good, despite the potential for a strong return on investment. Bad tenant experiences are the number one reason why landlords sell their property in search of greener pastures.

So, follow up with references, and implement the entire screening process, religiously. With all of this said, I’d like to shed some honesty here: Many landlords will lie in order to get the tenant out of their space. You need to be privy to this, as a landlord with a bad tenant will likely have reached their wits end, and be willing to do whatever it takes to get the tenant out of their rental space. This can give you a false sense of security. So equally as important as following up with the references, is to know what questions to ask, and how to interpret the answers.

Some standard questions that you should include are as follows:

How long did this person live in the rental space?

When did he/she rent from you?

Did he/she consistently pay rent on time?

Did they have any pets?

Did the tenant cause any damage beyond normal wear and tear?

Was the tenant generally respectful of you and your property?

Did any other tenants issue complaints about him/her?

Did the tenant give you proper notice to end the tenancy?

Would you rent to this tenant again?

Some more open ended questions in which you should gauge the response (in these scenarios, you are fishing for any dishonesty in the initial answers):

Can you tell me an instance in which you had difficulty with the tenant?

How did the tenant handle this situation?

When the tenant failed to pay rent by the due date, did they openly communicate with you regarding why? And did they pay as soon as they were able? How quickly were they able?

What sort of wear and tear did you notice in the property?

What kind of instance can you think of in which you had a difficult time dealing with the tenant?

These are just handful of questions that you should consider asking, and really, you should get creative and ask any open ended questions that get the reference talking. The more they talk the better. If they are lying in any way, shape or form, you can find holes in their story by just letting them speak.

But it shouldn’t stop at the landlord references. You should also be calling employer references and personal references. I would argue that personal references are least important, but that’s not to say you shouldn’t follow up. You never know what sort of feedback you may get. The employer will, in all likelihood, be the least biased reference, so do not fail to contact them. In addition to providing feedback on the tenant’s character, they can provide insights into their pay scale which will give you peace of mind in knowing that the tenant does have the money to pay.

Take these tips seriously, and your “bad tenants” will be few and far between.

 

 

Building Fire Safety: Annual Inspections

At least once a year, landlords will need to have a fire inspection done in their unit or building; it’s your job as a landlord to ensure that the building and units you rent out are fitted with all of the necessary detectors, in working fashion. You’ll need both fire alarms, as well as carbon monoxide detectors. With that said, you’ll want to be careful about who you hire to do the job. Unfortunately, there are many contractors out there who like to cut corners, and this may put you in a liable spot if the mechanisms fail to function as they should.

It is the landlord’s responsibility to ensure that their rental properties comply with the law, and it is illegal for a tenant of a rental property to remove the batteries or tamper with the alarm in any way. Failure to comply with the Fire Code smoke alarm requirements may result in a $360 ticket or a fine of up to $50,000 for individuals or $100,000 for corporations. Not to mention the guilt of putting someone’s life/lives in danger.

Some Things You Need To Know

Choosing the right alarms is crucial. If choosing an alarm that is electrically powered, it is recommended that it have a battery back-up in case of power failures. You may opt for an alarm that is fully battery powered. If so, this is fine, but you’ll need to ensure that the batteries are always working. Typically, you’ll want to install a new battery once a year, or as recommended by the manufacturer.

You’ll need a smoke alarm installed on every floor if you are renting out an entire house, or building. You’ll also need the alarms to be either on the ceiling, or high on the wall, as smoke rises.

You’ll need a carbon monoxide detector on every floor as well.

The smoke alarms must be less than 10 years old.

The carbon monoxide detectors must be less than 7 years old.

You should test your smoke alarms every single month. You can do this yourself as the landlord, or you can have your tenant do it and report back, provided you can trust that they will actually perform the task.

Dust can clog your alarms, and this is something that most people don’t think about. You’ll want to vacuum your alarms annually to avoid any excessive build up that may prevent them from functioning properly.

Another massive factor as a landlord is the fact that many alarms are overly sensitive. An overly sensitive alarm may go off from simple steam coming from a shower or smoke from a toaster or oven. The issue here is that your tenant may get frustrated with this and turn the alarm off, or tamper with it; yes, this would be illegal, but realistically, the tenant would simply get a slap on the wrist and possibly a small fine. They typically aren’t too worried as a result. Your best bet as a landlord is to handle these “nuisance alarms” before they cause issues. You can try relocating the alarm, you can install a “pause button” that would allow your tenant to temporarily deactivate it, or you can replace these alarms with photo-electric types.

Alarms will need to be situated directly outside of every bedroom/sleeping area of the home/unit.

One thing to avoid: avoid plug in carbon monoxide detectors. They may be convenient, but there is a good chance that your tenant will, eventually, unplug the detector because they “needed the plug”. They will forget to plug it back in, mark my words. Not because they’re stupid, but because people are incredibly absent minded.

Whatever alarms you choose to install in your unit/building/home, don’t skimp out. Buy products that are not easily tampered with, and come from reliable brands. It may cost you a little more up front, but it will cost a lot less than dealing with any legal issues that may come your way if your rental space catches fire. Not to mention, an early detection means less damage to deal with on the off chance that your space does encounter a fire; the proper authorities will be alerted much quicker. And lastly, nobody wants to live with the guilt of having put someone’s life in danger due to a preventable catastrophe.

So do yourself and your tenants a favor: pay them a visit, and make sure the rental spaces are all fitted properly. It just might save a life, and at very least, it will give you peace of mind knowing that you’ve handled your duties as a landlord.

 

 

How to Boost Residence Retention

Finding the right tenant,or tenants, can be difficult. Let’s face it; renting out a space in the GTA is process and a half. With all of the horror stories related to “professional tenants” who don’t pay rent, trash your space and give you nothing but headache, it can be an incredible relief to find a good tenant who pays on time, and respects you and your rental space. That’s why it’s so important to hang on to those tenants when you find them. Of course, there are always extenuating circumstances that will make losing a good tenant unavoidable i.e. they are ready to buy a home, they must relocate for work etc. But the last thing you want is to lose a great tenant to another landlord. Moreover, an empty unit is as good as throwing your money down the drain. So here are some tips and tricks for boosting residence retention.

Be Responsive and Communicate

If your tenant takes the time to reach out to you, they expect a response. Ignoring them is a sure fire way to lose the tenant once the lease agreement is up. A tenant needs a landlord who will respond to their service requests and questions timely and efficiently. In the rare case that you are unable to help the tenant with their request, or unable to answer their question, it’s still imperative that you respond and explain why you can’t help. This will at very least show the tenant that you hear them, and you want to make sure they are happy.

Be Proactive with Service

It’s the landlord’s responsibility to make sure the unit is livable and functioning. There are routine maintenance tasks that must be handled on a regular basis in order to fulfill this requirement. By scheduling this routine maintenance, you: a.) show the client that you want them to be comfortable and safe, and b.) prevent a buildup of problems. By showing your tenant that their safety and comfort is paramount, you are securing a healthy landlord/tenant relationship.

Keep Residents Informed

Whether you rent out one room or an entire building, you need to keep the residents informed of what is being done in or around the property. People don’t like surprises that interrupt their routine. If a tenant comes home to find their parking space filled, or unreachable, they will be upset. Wouldn’t you? So if construction is scheduled, make sure the tenant knows. If the fire department is coming in to check the fire alarms, make sure the tenant knows. If the parking lot is having maintenance done…you see where I’m going with this.

Incentivize Renewals

Maybe your tenant/tenants just need an incentive to stay? Consider apartment upgrades and perks. Maybe your tenant really needs a new TV. $500 out of your pocket to buy them a new TV can be considered an investment. After all, losing this great tenant and ending up with a not so great tenant can end up costing you a hefty amount more, to put it lightly.

Make Submitting a Request Effortless

Embrace new technology and make the process of submitting a request a breeze. Text messages, website contact, phone calls, as well as traditional face to face requests should all be part of your system. Young millennials will want to simply send a text and have the request handled. Older crowds may want to do things the old fashioned way and give you a call, or stop by your management office to submit their request. By providing options, you satisfy both crowds. Moreover, develop a system that keeps your tenants up to date with where their service request falls in the cue: send text updates, phone calls and visits depending on the tenant’s preference.

Try to Build a Sense of Community

This should be the case regardless of the size of inhabitants in your rental space/spaces. People are social creatures, and we like to be part of a community. Communities help each other and provide a stable foundation for families and single people alike. A true sense of community will be something that your tenant or tenants don’t want to leave. Consider hosting meet and greets, holiday parties, BBQ’s, introduce your tenants to the maintenance staff, and most importantly, show an interest in your tenant’s personal life/lives. This will go a long way in keeping your space occupied with good tenants.