What are your biggest problems when it comes to Rentals?

[trent_charles]

I was talking with a former REIN member and asking why she had become a member. She told me that she had joined REIN to learn how to pick the right tenants.



I was wondering if this is a common problem for property owners? How to find the best tenants and how to screen out the terrible ones.

 

[MatPiche]

Hey Trent,



A thing I've learned from working with investors is that they're buying in the wrong areas which often leads to a bad tenant profile. Most uneducated investors (not REIN members buy cheap. That's their MAIN priority, "gotta get in cheap".



The focus I put on my clients is buying in great areas to attract a great tenant profile. Sounds basic right? You want to be buying near highway access, schools, parks, transportation and amenities (shopping centers)



Step number 2 after buying a good property in a great area, is to have an updated and modern home. This doesn't mean you have to go crazy with renovations, but it has to look good. Better than the "average" rentals in the area.



This all sounds theoretical and great, but for more details on how to attract great tenants and run a great portfolio, feel free to get my E-book here for free. Buying great properties for my clients and partners to attract great tenants so I can sleep at night just happens to be my entire approach to real estate

 

[invst4profit]

Lesson one: NO GOOD DEED GOES UNPUNISHED (Landlords are not social workers or mommy and daddy.)



The major problem with being a landlord is the tenants. If tenants were not necessary to operate this business it would be a breeze.

The key to having good tenants lies primarily in screening. It is possible to get good tenants for any rental property but it must be done right. Do it right and your risks are reduced, do it wrong and you will regret ever having invested in income properties.



Second landlords must realize that it is your responsibility to teach them how to be good tenants. People are not born to be good tenants they require training.

Late rent payment for example is not tolerable. When a tenant does not pay on time they have damaged the landlord tenant relationship.

Immediately speak to them and let them know that it is your policy to issue a N4 (Ontario) when a tenant does not pay on time the first time. Tell them it is not your business or your concern as to why they are late. Inform them that a second late will not be tolerated and it will cost them $170 because you will be immediately applying to the landlord tenant board with a L9 to collect rent owing.

The L9 is best to use as it does not give the tenant a rent vacation as the N4 does, unlike the N4 it does not allow the tenant to walk away without paying and it will cost the tenant $170 every time you file one.



This is how tenants are taught the principal of responsible rent payments.



The learning curve for new landlords is very steep and unfortunately the majority fail right out of the gate when it comes to screening applicants. Mom and Pop rarely have a clue as to how to operate this business and will eventually get badly burned if they neglect screening.

 

[Angela123]

`She told me that she had joined REIN to learn how to pick the right tenants.` To know how to pick your tenants you should first know a hawk from a handsaw. While picking them ask all the necessary information you want to know and don`t be afraid. For example, you may ask his schedule (to know if this person is hardworking or he will stay at home all day long together with his friends), about his family, friends (how often will they visit him), his hobbies, etc. What is his paying ability, is his workplace stable`Or you may consider using an agency. Tenant selection is more of an art than a science. Instinct is important in letting, so trust your intuition. If you want to know more, read these books `How to Pick the Best Tenant` by Carolyn Gibson, `Every Landlord's Guide to Finding Great Tenants` by Janet Portman. Good luck!

 

[Thomas Beyer]

To make money in real estate you have to hold for a while: 5 years preferred, 10+ years is better. To do that you need cash-flow. To get cash-flow you need low vacancies. To get low vacancies you need decent tenant screening techniques. So yes, while the actual real estate is obviously relevant, the cash-flow from tenants' rent is critical.



It is hard to make money in vacant assets.















. ..

 

[Rickson9]

[quote user=trent_charles]I was talking with a former REIN member and asking why she had become a member. She told me that she had joined REIN to learn how to pick the right tenants.



I was wondering if this is a common problem for property owners? How to find the best tenants and how to screen out the terrible ones.





Speaking for myself, I don't have a clue about how to pick the right tenants nor do I have any interest in learning how to pick the right tenants. I hire a property manager to do that. As an investor, I'm just focusing on collecting assets and spending my time with my friends and family. Honestly.



This is not to say that my PM doesn't call me about late rent payments. With those, I am ruthless. I give my PM company the go-ahead to start the process of eviction the minute that I am informed. I disregard all excuses. Bar none. Often, the tenant pays the rent owing (along with penalties) and I never have repeat offenders.



I'm probably one of the few landlords who could actually afford to give a lot of leeway to my tenants, as I purchased distressed U.S. properties where the gross rent made up 20% of my purchase price; I made money from the get-go, but I don't. It sets a bad precedent. And I don't need to. Republican-controlled states support landlords over tenants and everybody knows it. I can have a sheriff show a tenant out in 2 weeks flat.

 

[invst4profit]

I envy the control you have over your properties. The fact is that in locations where governments favor the landlords over the tenants the tenant demographic is generally far more appreciative of what they have. Tenants have greater respect for property owners where they know the owner has the power to quickly evict.

In Ontario the government has taught tenants that they (the tenants) actually control the property and most know if they wish they can generally live for months rent free if they wish to allow the process to drag through evictions. More and more applicants are informing their prospective landlords up front that they "know their rights" as an outright intimidation tactic. You have to love this nanny state Ontario has turned into.


I must repeat that I truly envy the investment environment you operate under. Even western Canada has it better than here but not as good as you have it..

 

[BruceS]

[quote user=invst4profit]More and more applicants are informing their prospective landlords up front that they "know their rights" as an outright intimidation tactic.




I disagree.



If you own prime time properties in growing urban areas there are lots of great tenants out there in Ontario.



Tenants who want a safe and quiet place and want to rent from a professional landlord.



I have lots of applicants for my properties and I do very thorough tenant screening.



Because I bought in prime time growing areas in Ontario, I have a lot of choice and with good tenant screening and experience I choose tenants who respect me and my rental property.



It's one of the reasons I decided against investing in rural trailer parks. You won't attract enough great tenant applicants.



Because the rules in Ontario are challenging, it presents a great opportunity for professional landlords with rentals in prime time areas.

 

[kir]

I find more risk dealing with contractors then screening tenants.

Tenants gives you money, contractors take your money. Sometimes they take and don't come to work.







Kir.