How to Navigate Tenant Screening? Tips for Ontario Landlords

Tenant screening is the process of evaluating potential renters. It helps you decide who is suitable for your property. This process involves checking credit history, rental background, and personal references. Effective tenant screening is vital for landlords in Ontario. It protects your property investment and ensures a smooth leasing experience. A thorough screening can save you time, money, and stress in the long run.

In this guide, we will cover key steps in tenant screening. You will learn how to establish rental criteria, conduct credit checks, and ask the right questions. We will also discuss legal considerations and ways to protect your financial interests.

Understanding Tenant Screening in Ontario 

Tenant screening helps you avoid unreliable tenants who can lead to significant financial losses.

Effective tenant screening offers many benefits. It increases the chances of receiving timely rent payments. Good tenants are more likely to care for your property, reducing the need for repairs.

Proper screening also helps you avoid the stress and expense of evictions. By taking the time to screen tenants carefully, you protect your investment and create a stable rental environment.

Establishing Your Rental Criteria 

Setting clear rental criteria helps you identify the qualities you look for in a tenant.

Key factors to consider include income verification, credit score, and rental history. These criteria ensure that potential tenants can afford to pay rent and are likely to be responsible renters.

Defining Your Ideal Tenant 

Before you start screening, take time to define your ideal tenant. Consider the following aspects:

• Income: Determine how much the tenant should make. Many property management companies recommend requiring a minimum income that is three times the rent. Decide if you need a guarantor for tenants below a certain income level and establish an automatic 'no' income threshold.

• Rental History: A consistent rental history is often preferred. Look for tenants who have successfully rented before and have good references from previous landlords.

• Future Plans: Think about your rental timeline. Are you looking to rent your property for a short term or long term? This will influence the type of tenant you seek.

• Move-In Date: Clarify when you want your tenant to move in and, if applicable, when you expect them to move out.

• Pets: Consider your stance on pets. While some landlords prefer tenants without pets, others may choose to accept them. Determine what works best for your property and your preferences.

• Lifestyle: Think about the kind of tenants you want. Are you looking for working professionals, students, families, or another demographic? While you cannot discriminate, you can tailor your listing to attract your desired tenant type.

Importance of Tenant Credit Checks 

A tenant credit check is an important part of this process. It provides insights into a tenant's financial behavior and reliability.

Many property management companies recommend a minimum credit score of 650. This can help filter out applicants with poor credit histories. Understanding their credit background helps you assess whether they are likely to make timely payments.

Royal York has screened hundreds of thousands of tenants, refining their process to find the right fit for properties. By establishing your criteria based on these elements, you can increase your chances of selecting trustworthy tenants who will take care of your property.

Typical Costs for Tenant Screening  in Ontario

In Ontario, the costs for tenant screening can vary widely. On average, landlords may spend between $50 to $200 per applicant for basic background checks, which often include criminal history, credit checks, and rental history verification.

These checks are essential in evaluating the suitability of potential tenants.

Royal York Property Management offers a comprehensive tenant screening package for $995.00. This price includes a thorough evaluation process:

• Credit Checks: Detailed reports that assess the financial reliability of the tenant.

• Rental History Verification: Contacting previous landlords to confirm the tenant's rental behavior and payment history.

• Income Verification: Ensuring that the tenant’s income meets the required thresholds.

• Background Checks: Investigating any criminal history or problematic behavior.

The Value of This Investment 

Investing in tenant screening, despite its upfront cost, offers important long-term benefits. A thorough screening process helps you avoid the potential pitfalls of renting to unreliable tenants.

Problematic tenants can lead to costly evictions, property damage, and loss of rental income, which can amount to $20,000 or more. By ensuring that you select trustworthy tenants from the outset, you protect your financial interests and create a more stable rental environment.

In the end, the cost of tenant screening is a valuable investment in safeguarding your property and ensuring consistent rental income. The peace of mind that comes with knowing you have reliable tenants far outweighs the initial expense.

Questions to Ask Potential Tenants 

Here are some important questions to consider:

1. What is your current employment status?

1. Can you provide details about your rental history?

1. Why are you moving?

1. What is your monthly income?

1. Do you have any pets?

1. Can you provide references from previous landlords or employers?

1. What is your desired move-in date?

1. How long do you plan to stay?

Asking these questions helps you gather important information to assess potential tenants. This process not only helps in making informed decisions but also creates a transparent relationship with applicants.

Prioritizing clear communication and thorough verification can help protect your investment and create a positive renting experience.  

You can also ask for permission to run credit checks and request their name, address, and date of birth for this purpose.

However, you cannot ask about their social insurance number, past disputes with the Landlord and Tenant Board, or details about their age, disabilities, religion, sexual orientation, place of origin, family status, or gender expression.

Conducting a Thorough Renters Check 

A thorough renters check is crucial for landlords. It involves examining an applicant's background, including eviction history and criminal records. Understanding these aspects helps identify any red flags that could indicate future issues.

Eviction history is particularly telling. A past eviction may suggest that a tenant struggled with payments or violated lease terms. Similarly, a criminal background check can reveal behaviors that might pose risks to the property or other tenants.

Conducting a comprehensive renters check fosters a safe living environment.

Legal Considerations in Tenant Selection 

Familiarizing yourself with fair housing laws helps prevent discrimination based on race, color, religion, national origin, sex, familial status, disability, or any other protected class. Understanding these regulations ensures that all applicants are treated equally.

Documentation of the screening process is equally important. Keeping detailed records, including application forms, screening criteria, and results, can show that you have followed a fair and consistent approach. This practice not only protects you legally but also builds trust with potential tenants.

Consistency in decision-making is essential. Apply the same objective criteria to all applicants, regardless of personal biases or preferences. By focusing on established standards, you can create a transparent selection process that minimizes the risk of discrimination claims.

Protecting Your Financial Interests as a Landlord 

A thorough screening process helps you identify reliable tenants who are less likely to default on rent or cause damage to your property. By carefully evaluating applicants, you reduce the risk of costly evictions and property damage, which can impact your investment.

Drafting leases with enforceable terms is essential. Ensuring that your lease agreements comply with the Residential Tenancy Act and Human Rights Code provides legal protection and clarity for both you and your tenants. This commitment to well-structured leases can help prevent disputes and ensure that all parties understand their rights and responsibilities.

In addition to screening tenants, it's important to require them to transfer utilities into their name and provide proof of tenant insurance.

Final Thoughts 

By thoroughly evaluating potential tenants, you reduce the risks associated with unreliable renters, such as late payments and property damage.

Ontario landlords are encouraged to adopt clear and consistent screening criteria to identify suitable tenants effectively.

Prioritizing a comprehensive approach to tenant screening not only safeguards your investment but also fosters a responsible and respectful landlord-tenant relationship.

If you want peace of mind in your tenant screening process, consider partnering with Royal York Property Management. Our expertise in thorough tenant evaluations can help you find the right tenants for your property.

Edona Shala
T.  (833) 666-3306
E.  [email protected]
W. royalyorkpropertymanagement.ca