One of the most important steps in running a successful income property is signing the tenant. Having the right tenants can mean the difference between success or complete frustration. If you’ve chosen well, your property will practically run itself.
Landlords/property owners must follow a well planned process. Taking the first couple (and I’ve heard this has been done) to have first and last months rent can cost you money and sleep in the long run. Screening your prospects and proper background checks are paramount.
First, have your unit “show ready”. If it’s already vacant great, you can begin the clean up, repairs or alterations you want to make. Showing your unit before it’s ready can turn off your best prospects.
The next step is to get your advertising out there. Lawn signs aren’t enough. Many people look online for apartments as well as print advertising, learn to use it. If possible have everything set to go at once. This is your Ad’ campaign .
If you haven’t already done this, have your application form for the income property ready to go. Get them to fill it out on site if possible. People forget what they saw or loose the rental application.
I personally like to get a few applications to run them at once. If they’ve left blanks ask them why as this can indicate any red flags right from the start. Too many blanks and I file it under G! It’s a good idea to run a credit check. We want tenants who don't have a lot of outstanding bills or debt . You could find a service or property manager for this /service-packagesex.html, Whomever you have chosen to run the credit checks should help explain what's good or bad about them.
You may also like the idea of a background check. Ask them if they would provide one. This can be obtained at any local police department.. The process should take a few days. Of course getting references is a must. Call their current landlord and especially the previous ones. Your tenant background check shows the real story behind the smiling faces.
So, their income looks good and they are who they say they are. Your next step is to collect a rental deposit. Collecting first and last months rent should be done before handing over the keys. It’s important to have the right wording in your contract. Have a lawyer review your rental agreement before putting it in use.
You can have the tenants meet you at the rental property or a neutral location. Have anyone over the age of 18 who will be living there to sign the lease. Check your local real estate laws but in Ontario the Landlord tenant act demands the new signee receives a written copy of the lease and your legal name and address.
The day of the move in, do a walk through with your new tenants in the unit . You should have a form for this as well.You can grab one of my here _
Get your tenant to sign after each item has been examined. The current conditions of the rooms, should be disclosed . After each article has been examined get them to sign beside your form . Another idea is to take a picture of each room and then get the tenant's signature. A video may also be sufficient.
I personally prefer post dated cheques as a form of monthly payments. You and the tenants must agree upon a method prior to moving. Many people are now doing online etransfers which will cost about $1 dollar but is instantaneous . And don’t forget before the big move in day, have your unit clean and ready.
This is not an exhaustive article on tenant signing. And I will be covering more details on the subject in future articles.
Glenn Brown is owner of My Rental Unit property management and has enjoyed success with multiple unit investing.