Finding the right tenants is crucial for a successful landlord-tenant relationship. In this blog post, we’ll conduct a tenant screening masterclass, guiding landlords through the essential steps to identify reliable and responsible tenants for your Ontario rental properties.
1. Establish Clear Screening Criteria
Create a defined list of documents you require from all tenants, and hold firm to it unless extenuating circumstances exist that would make it impossible for the applicant to provide the information. An example would include a self-employed individual being asked for pay stubs.
In unique circumstances, getting creative is encouraged. For example, self-employed individuals may be able to provide bank statements, invoices or the previous year’s Notice of Assessment.
Here’s our go-to list of required documents:
- Two or more consecutive pay stubs from the most recent pay periods
- Job letter on company letterhead
- Credit report from a major bureau
- Government-issued photo ID
- Completed and signed rental application
- References from previous landlords (minimum 2 years)
- Proof of income (minimum 3x rent-to-income ratio)
2. Request Comprehensive Tenant Applications
Require prospective tenants to complete comprehensive applications. This should include personal and financial information, rental history, and references. Thorough applications provide valuable insights into a tenant’s background and help establish consistent tenant screening standards.
Essential application components include:
- Full legal names and contact information for all occupants
- Employment history (minimum 2 years)
- Rental history (minimum 3 previous addresses)
- Emergency contact information
- Authorization for credit and background checks
- Disclosure of smoking habits and pets
- Consent to verify all provided information
3. Run Background and Credit Checks
While requiring a tenant to provide a credit report is essential, we always recommend the Landlord purchase their credit report for the applicant, too. The average person may not be able to detect a fraudulent credit report, and it happens more often than you’d think. Another reason to pull a report, is because sometimes a tenant will conveniently choose the credit report from the reporting company that provides a more attractive profile. Not all trades and credit history may have been reported to all credit reporting companies.
Key elements to verify in credit reports:
- Credit score (minimum 650 recommended for Ontario rentals)
- Payment history and delinquencies
- Outstanding debts and collections
- Bankruptcy history (if applicable)
- Credit utilization ratios
- Number of recent credit inquiries
4. Verify Rental History and References
Contact previous landlords and personal references provided by the tenant. These conversations offer valuable perspectives on the tenant’s behaviour, reliability, and suitability for your property. You’d be amazed at how often professional tenants hire individuals to act as a previous landlord or employer.
By asking questions that only a person in that position would know, such as “how many bedrooms did the rental property have?” “How much were they paying in rent?” or “How long has the company employed Mr. Tenant?” may reveal a fraudster.
Essential verification questions:
- Did the tenant pay rent on time consistently?
- Were there any property damage issues?
- Did they give proper notice when moving out?
- Would you rent to this tenant again?
- Were there any noise complaints or neighbor issues?
- Did they maintain the property well?
- Was the security deposit returned in full? If not, why?
5. Perform a Face-to-Face Interview
Always finish off with an in-person or virtual meeting. It’s easy to lie on documents; not everyone is cut out to do it in real-time. Sometimes, these meetings will solidify your confidence in the tenant, or maybe there’s a personality conflict that you’re uncomfortable with handling as a Landlord.
Key interview questions to ask:
- Why are you moving from your current residence?
- What do you like about this particular property?
- How many people will be living in the unit?
- What is your typical monthly budget for housing?
- Do you have any questions about the lease or property rules?
- What are your long-term housing plans?
- How do you handle maintenance requests or issues?
6. Additional Screening Best Practices
Income Verification Guidelines
A general rule is that a tenant’s gross monthly income should be at least 3 times the monthly rent. For self-employed applicants, request 2 years of tax returns or Notice of Assessments along with recent bank statements showing consistent income deposits.
Social Media Screening (Optional)
While respecting privacy, a quick public social media check can sometimes reveal red flags about lifestyle, employment claims, or previous rental situations that weren’t disclosed.
Document Everything
Keep detailed records of all screening steps, communications, and decisions. This documentation protects you from potential discrimination claims and provides evidence of your thorough vetting process.
Conclusion: Mastering Tenant Screening
Tenant screening is a critical aspect of property management. By establishing clear criteria, requesting comprehensive applications, running background checks, and verifying rental history, landlords can make informed decisions that contribute to a positive rental experience.
Remember: The time invested in thorough tenant screening pays dividends in reduced turnover, fewer maintenance issues, and consistent rental income. A bad tenant can cost you thousands in lost rent, damages, and legal fees, making comprehensive screening one of your most important investments as a landlord.
Stay tuned for more expert insights on successful property management.
Need Professional Tenant Screening Assistance?
At Renti, we specialize in comprehensive tenant vetting services for Ontario landlords. Our rigorous screening process includes credit checks, employment verification, rental history confirmation, and personal interviews to ensure you get reliable, responsible tenants.
