The inherent risks of being a landlord leave even the most experienced property managers a little taken aback when their biggest tenant-related fears come true.
SingleKey developed a survey to discover landlords’ fears when it comes to finding the right tenant for their rental properties. This guide will review and rank a property manager’s biggest concerns and share solutions for vetting and approving ideal tenants.
Non-payment of rent or late payments
When SingleKey asked landlords what their greatest fear was, just under half said their biggest concern was unpaid rent or late payments. Whether a tenant is delinquent or stops paying their rent, the outcome can create a negative cash flow for many property owners, leading to a distressing financial situation.
Property management can be challenging. Late rental payments are a palpable fear. If you’re a property owner who decides to take on the role of a landlord, you must do your due diligence to reduce the risk of approving a tenant with a history of falling behind on rent. Even then, unforeseen events can occur, where tenants are late on rent by no fault of their own.
When a unit is empty, a landlord loses rental income. If a unit is occupied and the tenant fails to make payments, you lose rental income and have the added responsibility of resolving a payment schedule with the tenant. If a landlord cannot come to a reasonable solution with a tenant, the final option is eviction if non-payment continues.
In addition to having a tenant who is delinquent and occupying your rental, there are excessive administrative duties, extra fees, and long wait times many landlords must endure. Evicting a tenant can seem interminable due to backlogs and court delays––these factors validate the fear of unpaid rent.
How late can a tenant be on rent before eviction?
In British Columbia, if current tenants fail to pay rent by midnight on the due date, a landlord can submit a 10-day notice to end the tenancy, beginning the day after the rent is due. When a current tenant is late on utilities, a landlord can issue an eviction notice 30 days after submitting a written notice for a utility payment request. In Alberta, the landlord must give their tenant 14 days to pay their rent. A 14-Day Eviction Notice must be in writing and include all pertinent information, including the address of the rental property, the landlord’s signature, and the date the tenancy will end.
After receiving an eviction notice, the tenant can apply for a dispute resolution within the appropriate time frame. A tenant submitting a dispute resolution will delay the eviction process.
What can landlords do to ensure rent is guaranteed?
First, pre-screening will allow you to get acquainted with prospective tenants. Once you start receiving rental applications, there are steps to take to assess whether a potential tenant will be a match made in rental heaven or if any reg flags will emerge. Pre-screening will also help you spot fake rental applications much earlier.
Ask for references
Collect the contact information of previous landlords to learn about a tenant’s rental history. The rental applicant may seem personable and eager to move in during the pre-screening process, but the formal screening can confirm their past actions. It’s also important to ask potential tenants questions to narrow the list of candidates. If they were considered bad tenants by their past landlords, you could ask the references why. Aside from late rental payments, a tenant would be considered less than ideal for several reasons. Those reasons can include being a nuisance to other residents or neighbours or being the cause of major property damage.
Incorporate a background and credit check
Background checks may include a person’s criminal history, allowing landlords to decide whether they want to proceed with an applicant. Property managers must ask for consent when running a background or credit check.
A credit report captures the prospective tenant’s credit score and their credit history. Credit scores can go up and down for various reasons and shouldn’t necessarily determine whether you approve or reject an application. A holistic view of tenant screening reports will help you analyze who best suits your rental property.
How an online tenant screening service can help
With the help of an online tenant screening service, you can deduce much quicker which tenant you want to approve. Here’s what a SingleKey Tenant Report will provide:
- Equifax credit check
- Background check
- Social media scan
- Public court record search
- Income and employment verification
You can access a rental applicant’s credit report and other essential information in minutes. SingleKey offers a tenant screening platform that includes automated tools for rent collection, as well as a Rent Guarantee Program, to protect against tenant delinquency or property damage.
By integrating the Rent Collection feature, you don’t have to worry about collecting rent. The rent is collected for you. SingleKey reports all rent payments to the credit bureau, which can benefit the tenant if they are looking for ways to raise their credit score and will motivate them to pay rent on time.
Dealing with difficult tenants and eviction proceedings
Disruptive behaviour is alarming to landlords and becomes a more significant issue when tenants refuse to comply with lease terms or leave the property. Property damage and harassing other residents fall under the category of disruptive behaviour and can lead to eviction. Over 24 percent of landlords say they are concerned about disruptive behaviour.
Property damage caused by the tenant
Responses from our survey indicate that 18 percent of landlords are concerned about property damage. Property damage can be costly, whether accidental or intentional, or a lingering problem waiting to happen due to lack of maintenance.
It’s standard in most places for a landlord to require a deposit covering any property damage a tenant is responsible for. If accidental damage occurs, such as leaks, water damage, or mold, the landlord is responsible for covering the cost of repairs.
Including liability coverage in a renter’s insurance policy can help prevent out-of-pocket costs. The most effective way to reduce the risk of accidental property damage is by completing a move-in inspection report. Suppose you notice a feature about the property that can worsen with wear and tear or impending weather conditions. In that case, it’s wise to address the problem preemptively before the tenant moves into the premises.
A pet policy on a lease agreement and a pet deposit can help set guidelines and cover the costs for any pet-related damages. For example, landlord in British Columbia can make reasonable pet-related rules to reduce damages.
When damage is caused intentionally by the tenant stemming from disruptive behaviour, the landlord can file a claim against that tenant if the cost of damage is beyond the security deposit costs. As a landlord, you can minimize the risk of renting to an unruly prospective renter. Learn how to screen tenants like a professional property manager during the pre-screening and tenant screening processes.
Legal advice and challenges for landlords
Despite the real threat of landlord-tenant disputes, less than 12 percent of landlords are concerned with legal challenges. There are increased delays in landlord-tenant disputes in Ontario and British Columbia. Some delays average an eight-month wait. Every landlord should prepare for this backlog and understand how to deal with tenant complaints appropriately. Tenant screening is essential for avoiding these circumstances.
In some provinces, dispute resolution services are offered for residential tenancies. For example, tenants in British Columbia can reach out to the Residential Tenancy Branch regarding these services. Usually, a diplomatic and adept landlord can resolve any grievances with the tenant before the dispute reaches government departments. If the dispute is irreconcilable, a landlord should know what evidence they must provide to resolve it.
FAQ: What is a landlord’s biggest fear in tenant screening?
Landlords can verify a person’s income, check criminal records, and ask for landlord references to confirm the prospective tenant has an excellent rental history. Learning how to pre-screen tenants will be incredibly helpful to landlords during the beginning stages of the screening process.
Property managers can conduct routine inspections to ensure the property remains in good condition. A move-in inspection is necessary for both the landlord and the tenant. If the landlord wishes to conduct a property inspection during the tenancy, the landlord must provide proper notice to the tenant before entering the premises.
Bad credit history, an extensive criminal record, excessive late payments, or unpaid rent in an applicant’s rental history all count as red flags. Learn how to recognize red flags during the screening process.
Our final thoughts
If you are new to property management, having a helping hand in the tenant screening process and access to valuable features in a tenant screening platform can ease your concerns about finding your ideal tenant. SingleKey can provide you with the right resources and a comprehensive Tenant Report to help you find the best tenant for your property.