**I have decided to compile a bunch of info for everyone. I receive 'help' PMs almost daily in regards to tenancy issues, and although I enjoy helping, I think having some general information available for everyone would be handy**
So, you have gone out and purchased a property to rent out or you want strangers in your basement to help pay the mortgage. Wasting your money of hiring a property management company is silly, so you have decided to become an amateur landlord. Cool! But….how? Below is a loose guide of how to be a successful amateur landlord.
PRODUCT
First thing you need to do is make sure the product you are selling is of good quality. Don’t throw a haphazard suite into a basement and expect to attract quality tenants. On the flip side, don’t install granite counter tops when nice, clean, and attractive laminate counter tops will suffice. If you are renting your basement suite, make sure it is legal. Ensure that all city bylaws are followed, fire-rated products are used, and other safety requirements are followed. The last thing you need on top of a city fine is to pay your tenants to move. Moreover, should there be a fire where lives are lost, you could be held liable.
Walls should be freshly painted, carpeting should be freshly cleaned, any minor repairs should be done, and the suite should be relatively modern (no quality tenant will want to rent a basement with wood paneling). Apartments will have less of these issues to deal with, but the same rules apply to all rental properties. You don’t need to invest A LOT in these suites, but sometimes even using contemporary paint colours can really improve and modernize the space.
FINDING QUALITY TENANTS
It is up to you how you advertise, but Craigslist is probably the best place to start. If you want to attract a specific group of people, certain newspapers will be beneficial, but at the end of the day MY attitude is….if you can’t use or have access to a computer, I am really not interested.
Personally, I find the best tenants start looking for a place the month before they want to move or the first week of the month. Now, this is a generalization and I have found quality tenants at all times of the month, but there is a strong correlation between quality and early in the month seekers. As the month drags on, the less desirable people become. Desperation breeds eagerness. If you have found someone who is willing to throw money at you on the spot before they really have a look at the place, something ain’t right. Quality tenants don’t throw their money around to solve problems…. crackheads do. Don’t be distracted by the cash and it is never enough to cover how bad they will fuck you. Quality people have chequing accounts. Quality people can afford the write a cheque for the security and pet deposits. Quality people will know the value of a dollar and may try and negotiate a lower price.
Quality people will ask good questions. What is the neighbourhood like? What are the neighbours like? Where is the closest store? Transit? Is there smoking inside? Is it noisy? What is included in the rent? Are there issues with pest/rodents/insects? Where is parking? Asking 101 questions, for the most part, is a good thing. You want people to care. You want people to be aware and understand what they are getting into. Don’t lie with your answers. Be honest, clear with what is included, be open to negotiation (if the tenant is desirable), be firm, and ask them questions. Where do they work? Go to school? Who is planning on living with you? How long are you planning on staying?
Make note of how they are dressed. People who want to make a good impression will care enough to look presentable. Exceptions to this rule are those who are viewing the rental suite “after work”. You can not expect a guy who works on a construction to show up in his Sunday best if he is viewing the place on his way home from work.
The number one way to find a quality tenant:
GO WITH YOUR GUT! If you have a small little twinge in our gut that is telling you something isn’t right….it isn’t.
VETTING TENANTS
Always have your potential renters fill out proper applications. You can make one, find one on the internet, or order some from BCAOMA (
BC Apartment Owners & Managers Association - BCAOMA). Here is a link to their application:
http://www.rentersguide.com/_literat...on_for_Tenancy. Read the application. Understand the application.
You should run a credit check and phone references. A credit check is not necessarily the best indicator whether someone is a good tenant, but it will give you an idea of how they pay bills. Credit checks can be conducted at
http://www.rentcheckcorp.com/ for a small fee.
I find that calling a current or previous landlord to be the best way to assess the potential tenant.
The main questions you should have answered are:
-Does this tenant pay rent on time?
-Have you had any complaints from neighbours in regards to this tenant?
-Does this tenant welcome less than desirable people into the rental suite?
-Have you ever had to issue a warning letter or have you issued an eviction letter to this tenant?
You should also confirm that the tenant has provided the correct address, the correct length of stay, and the same reason that tenant is leaving. Let’s face it, people lie and sometimes people lie well. You are also open to contact other references such as place of employment to confirm income and/or personal references. The longer you are a landlord, the better you will get at determining whether this tenant will be a good or bad one….but…some will always surprise you.
ENTERING INTO A TENANCY
Now that you have found a tenant(s) you need to know the Residential Tenancy Act. It is not difficult to understand, it is not long, it is free, there are several “help” sheets, it is online, there is a number you can call for free to get free advice (
Residential Tenancy Branch : Government of British Columbia). There is NO excuse not to know the Residential Tenancy Act. This will be your best friend. When you have a question, it will have your answer.
There are a few tenancy agreement forms that can be used but ones that provide the most details are beneficial. Again, you can order these forms from BCAOMA for a small fee (or use this copy:
http://moinvestments.com/mo/BCAOMA%2...0Agreement.pdf) or you can print one off for free from the BC Residential Tenancy Website (
http://www.rto.gov.bc.ca/documents/RTB-1.pdf). I prefer the agreements from BCAOMA because they contain a lot of valuable information all in one place. Tenant rights and Landlord rights are clear and if there is ever a question, you can refer to it. Make sure you have a copy and make sure your tenant has a copy. You will also see on the BCAOMA form that there is an area where you can add your own clauses, ie: smoking, drugs, pets, etc. Use this area to reiterate your concerns.
Basic things to remember/know:
-You can NOT collect a security deposit that is more than ½ the rent.
-You can NOT collect a pet deposit that is more than ½ the rent.
-You can NOT collect “first and last” months’ rent.
-You can NOT deposit rent for the month until the 1st. This means that if you are given a cheque for September’s rent, it can not be deposited in August.
Prior to official possession, you should perform and initial “walk-thru” with your new tenant and have THEM fill out a condition report (
http://www.rto.gov.bc.ca/documents/RTB-27.pdf). This form is imperative and all parties should have a copy.
MAINTAINING A GOOD TENANCY
Assuming that you have all your proper paper work and you are well-versed in the BC Residential Tenancy Act, any question or issues with the tenancy should be easily solved by referring to the agreed upon contract.
To keep your tenant (and you) happy, keep your distance but be available to deal with issues. Don’t let maintenance problems get out of hand, when appliances break they should be fixed or replaced quickly (if it is a fridge, think about a small compensation for lost groceries), reasonable complaints about neighbours should be heard and dealt with efficiently, etc. That being said, don’t be a push over. You do not need to be at your tenants’ beck and call for minor repairs and silly complaints.
Be flexible with good tenants. If your tenant has paid on time with no issues for 8 months and on the 9th month they are late with a valid excuse, don’t be a dick. It happens. Banks mess up, jobs change, emergencies happen, and people forget. If you run into a consistent problem with your tenants paying rent on time or rent at all, you need to deal with it swiftly.
There are very specific ways for tenants to give notice when they are moving. They must give a one month’s notice and they must do it before the 1st of the month. Be as flexible as you want without screwing yourself. Not many people know about this rule, so either make sure they are aware when they move in or understand that it may not be followed when they moved.
Basic things to remember/know:
-You are not allowed to limit tenant’s guests unless they stay more than 14 consecutive nights (see the Act).
-You are not allowed to enter the rental property without 24 hours written notice, unless it is an emergency (see Act for what constitutes an emergency).
-You are required to stay on top of maintenance issues during the tenancy but the tenant is responsible for light bulbs and fuses.
-Tenancies start and finish on the 1st of the month. A tenant can not give notice for the 15th of the month unless you make a specific agreement with them.
WHEN A TENANCY GOES WRONG
There are a lot of grey areas in the Residential Tenancy Act, but failure to pay rent is not one of them. It is very black and white and you should know the rules. Tenancies can also go wrong when a tenant breaks one of the rules in the signed agreement. Smoking, parties, noise, drugs, damage, health and safety, pets, failure to comply with notices, etc. are most of the reasons that tenancies take a turn. It is your responsibility to know how to deal with this. These issues are common and you do not need to be a victim. The Tenancy Branch is there to serve you for free and everyone should utilize it.
Basic things to remember/know:
-Payment of rent is due on the 1st of the month…every month regardless of Sundays, weekends, holidays, bank holidays, or any other excuse a tenant will use. It rent is not paid by 12:01am on the 2nd, it is late. You can issue this notice that will give the tenant 5 days to pay:
http://www.rto.gov.bc.ca/documents/RTB-30.pdf. If they have not paid or filed to fight the notice within those 5 day, they will be forced to move.
-If a tenant is late 3 times within a short period of time (12 months), that tenant can be evicted without warning by using this form:
http://www.rto.gov.bc.ca/documents/RTB-33.pdf. This RTB-33 form can also be used to evict a tenant for cause.
- Read these notices, understand these notices, and make sure these notices are issued as they should to avoid them being thrown out in court.
-Documenting everything is imperative should your case go to court. You have the burden of proof.
-Arbitration is a complicated process, but if you know what you are doing, you will be successful.
-Sometimes, no matter how well you vet a tenant, how great their references are, and how great they present themselves, we have all been screwed at one point. A few of them always slip through and you shouldn’t feel bad about it.
Overall, I can not reiterate enough how important it is that every landlord, whether professional or amateur, needs to know the Residential Tenancy Agreement. If you don’t and you are screwed over, it is your fault. The real bad ones will know the Act as well as you. Furthermore, the tenancy branch is there for you. These people are government employees paid to help you for free. You can call or visit them in person and they will provide you with all the information, guidelines, and forms you need.
It is also imperative that you sign the proper paper work with your tenants. If you move someone into your property but do not have a signed tenancy agreement, you are asking for trouble. Expect to get screwed over and not be able to do anything about it.
Coming soon:
-So you are going to be a tenant
-So you are going to arbitration
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