Mr Cheap, a very cool chap, wrote a 5 part series about his experience renting out his condo over at Money Smarts Blog. During the entire process, he kept complimenting me. He really knows how to charm the ladies. It was very interesting to me, I’ve been leasing apartments for so long a lot of the process is second nature. I forget how much you have to learn just to rent to decent tenants. I wanted him to finish the series so that readers could read the posts all at once. I even thought he should have written a sixth post called I Survived the Rental Process. He would put up his feet, breath a giant sigh of relief, watch a movie and drink some beer.
Should You Increase the Rent?
In his first post, How To Screen Tenants, Mr Cheap tells us all about the existential angst of giving a rent increase and having the tenants give notice to move shortly after. Did they move because of it or not? My vote is no way.
Free or Paid Ads?
In his second post Screening Tenants – Advertising and Showing he talks about all the free advertising available. I too use craigslist but not kijiji because of their incessant spam. I already have enough Viagra, thanks. Far better than both these sites is Viewit.ca. I find I get the best tenants via that site.
Shocking him is the way that tenants just stand landlords up on a regular basis. After I shared with him how to implement confirmation calls, I’m assuming he started the healing journey from the abandonment issues suffered at the hands of potential renters.
In Mr. Cheap’s third post Screening Tenants – Filling Out Application speaks to the proof being in the pudding… he thinks that 50% of tenants should take an application. I think you only need one great tenant for every place!
I have a very different application process. I only process applications with a deposit, I only process one application at a time, if the tenant changes their mind they lose their deposit, if I turn them down I give them their money back. By the time they get the application they’ve already made it through my “soft” screening process. Others don’t even get an application.
Article four is about Screening Tenants – Credit Check. The bottom line is you have to check people out. If you had $400,000 in cash, the average value of a house in Toronto, would you trust just anyone around your giant pile of of cash? Here random guy answering an ad from craigslist, take care of my pile of cash or $400,000 asset. This is the time to be suspicious and downright paranoid. Verify everything you’re told.
Out with the Old Tenants, In with the New Tenants
The final segment of Mr Cheap’s great saga is about the transition between one tenant to another. Screening Tenants – Lease Agreement and Repairs talks about how offended his tenants are that he doesn’t want them to stay on for a few more free days to make their life more convenient while he loses a whole month’s rent.
Alexandra and I are quite a bit more mercenary than Mr. Cheap about his existing tenants inconvenience during a few small repairs he has to do as well. Property managers learn to develop a giant “not my problem” field around many issues. Anyone who’s ever worked in a building knows that moving days are as crazy as it gets. Chances are that even if you have 9 elevators, 8 will be broken or not working properly when people want to move in. By the end of the day…you’ll be ready for the asylum.
You’ll usually have a few “unscheduled move outs” or skips trying to break their lease. Thank god for all the sneaky flyer delivery guys, if someone performs a midnight move, when you go to deliver the N-4 (non-payment of rent form) or L-1 (notice of hearing) you see a whack of flyers stuck in their door. Then you know they’ve moved on. This way you don’t have to wait the extra months until the legal eviction, you can rent it right away. If you have a rental house with a non paying tenant it’s a great idea to ask a nosy neighbour to give you a call if they move out.
Kudo’s to Mr. Cheap for this detailed description of the entire process of renting his condo from the notice period to the new tenant move in process!