Real estate investors who become landlords must learn to distinguish a good tenant from a bad one. Their success in the rental business depends on it. Bad tenants are the number one reason for landlords leaving the industry and selling their properties. Selecting the right tenants therefore, is the most important step in the real estate rental business.

Screening potential tenants before allowing them to move into your property will protect you against those tenants who can later become big headaches. You have no doubt heard horror stories of tenants not paying their rent, causing damage to properties or disturbing other good tenants. Tenancy laws throughout Canada differ greatly, but they all set out specific protections for both landlords and tenants. However, most landlords will agree that the laws largely favour tenants in almost every situation. Landlords can therefore be forced to endure a problematic tenancy for months, or even years.

Carefully screening tenants can help landlords avoid many problems.

A comprehensive screening of potential tenants is the only way of assessing the kind of tenant they will be. No matter how thorough you are however, there are no guaranteed ways of knowing the future. Screening effectively can only help you choose the best possible applicant for the property. Good documents provide a solid foundation for a successful tenancy, so these documents should clearly spell out everybody’s responsibilities and rights. During times of difficulty, these forms can offer some guidance and clarification.

Here are 3 documents that landlords should use while screening potential tenants:

1. Rental Application Form

This is the most important document in the rental process.

A good rental application will ask potential tenants to provide:
• the applicant’s job title
• their supervisor
• their income
• current address
• references (both former and current landlords as well as personal)
• government identification
• next of kin and extended family members
• other details believed to be relevant to the approval process

All of this information will help a landlord get a sense of the tenant’s quality. It also provides contacts useful in tracking down a tenant if they should disappear. Visit http://www.megadox.com/c/1224 to get instant access to downloadable Rental Property Management Forms for the Province of Ontario.

2. Move-In Inspection Report

This report quantifies and documents the condition of a property upon moving in. If there is any damage discovered when the tenant leaves, it can be substantiated with this form. A landlord can avoid significant disputes over tenant-related damage if there is a clear record of the property’s condition prior to the tenant moving in.

3. Residential Tenancy Agreement

This document establishes the terms of the tenancy agreement between tenant and landlord. Do not use a free online residential tenancy document! It will not be sufficient to cover your interests. For a comprehensive Ontario form, go to http://www.megadox.com/c/1471. Make sure to provide a copy to your tenant as well.

Although not infallible, this 3 step process is a reliable way for landlords to weed out the bad tenants. The best strategy is AVOIDING the problems instead of trying to deal with them after they occur. Getting rid of a trouble tenant can be a long and expensive process. By screening your applicants thoroughly, you can dodge the obvious headaches.

Are you a landlord? What other ways do you use to screen potential renters?

If you are looking to buy a home, or are thinking of selling yours, I would be glad to represent you and help you negotiate the best deal. Please contact me at steve@stevewalsh.ca.

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