# Pick your tenants wisely



## Cal

I thought I would post this article. Being a landlord either seems to be great or a nightmare.

http://cnews.canoe.ca/CNEWS/Canada/2010/01/07/12375051-sun.html

There seems to be many articles, postings, comments about the cash flow/investment side of rental property, but this covers the human side of being a landlord.

And yes...it isn't always like this. I have had some great tenants over the years.


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## Four Pillars

I understand her frustration, but at the same time - this is one of the risks of being a landlord. It's hard to get people out if they don't pay and don't want to leave.

I wonder if she thought real estate investment was "passive income"?


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## iherald

Cal said:


> I thought I would post this article. Being a landlord either seems to be great or a nightmare.
> 
> http://cnews.canoe.ca/CNEWS/Canada/2010/01/07/12375051-sun.html
> 
> There seems to be many articles, postings, comments about the cash flow/investment side of rental property, but this covers the human side of being a landlord.
> 
> And yes...it isn't always like this. I have had some great tenants over the years.


I just bought my first duplex and seem to have great tenants. But, any advice on how to pick tenants?


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## CuriousReader

Sadly, another example of broken bureaucracy when a simple common-sense would have solved the problem.

In any case, makes you wonder how the tenant got the Bentley to begin with? I am thinking she went to a dealership and just sit in the car for months going on hunger-strike and doing all the regular humanly things there until finally the dealership gave up and let her drive away the car for free.


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## Berubeland

I am in the business of avoiding situations exactly like these and I can tell you that people like this exist and are preying on landlords. Like thieves they look for easy pickings. Certain things make you very vulnerable to people like these.

1. Desperation - Don't be desperate to rent. I know it's difficult to pay your rental property mortgage and your own. 

2. Look for honestly - If someone starts out by telling me a funky story or something that doesn't add up watch out. 

3. A crappy property that is not well maintained - It does not matter what rent you charge a crappy dirty place will attract crappy dirty people. I really cannot emphasize this enough. You would be thoroughly disgusted at what people expect other people to live in. But they have to pay the rent or else.

4. Be realistic - No Drs or laywers want to rent your small three bedroom house with an old kitchen in Scarborough. They don't want to or have to. You will turn down good honest tenants until you become desperate and victim of a liar.

5. Price yourself at the market not above or below - Seriously people expect to pay a certain price for a house in the Beaches and if you are priced below that no one decent will want to waste their time (believing its a scam). If you price yourself above you attract people who don't care about price mostly people who cannot manage their money. 

There are two kinds of tenants who don't smoke, don't drink, have great jobs, have no pets, no kids, quiet, well presented, polite, and perfect. 

The first kind are about 1 in 50 people 

The second kind are liars. 

My # 1 criteria for rental is the ability to pay the rent. Full Stop 

The Landlord & Tenant Board is very frustrating for many landlords but some people have unrealistic expectations about what the Board should do for you.

When you rent your property you are turning over "legal possession" of your property. 

I liken it to leasing a car which is a very similar from legal standpoint. Can you tell people what to put in their car? if they can smoke? play music? if they can have a dog in their car? No well it's the same if you are a landlord. From the moment you give them the key it is their space. 

And you know what? The tenant is your customer.... so treat them nicely and professionally. In no other business I know of can someone get thousands of $ per year in rent and still ***** about paying $100 to replace a leaky tap.

Oh and please don't hire a realtor to rent your house out. Get a rental agency to rent out your house. Rental agencies will also evict the person they rent to FOR FREE as a TERM OF THEIR CONTRACT. Then they will also RERENT IT FOR FREE. Also they won't bug you to sell your house the whole time.


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## HaroldCrump

The real estate section of the CBO forum is full of such horror stories, frustrations and injustices against landlords.
It's just not worth being a small time retail landlord with your own money and personal financial well-being at stake (at least in these parts of Ontario).
Unless you have a bunch of lawyers, goons and other kinds of "professionals" at your disposal, it's a suckers game.
Buy units of a REIT and go back to bed....


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## iherald

Berubeland said:


> I liken it to leasing a car which is a very similar from legal standpoint. Can you tell people what to put in their car? if they can smoke? play music? if they can have a dog in their car? No well it's the same if you are a landlord. From the moment you give them the key it is their space.
> .


I had never thought of it this way, it's a good analogy.


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## FrugalTrader

Being a landlord is a second job. It can be a great source of income but, unless you have a great property manager, dealing with one bad tenant can really put a damper on the rental investment experience.


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## ssimps

HaroldCrump said:


> The real estate section of the CBO forum is full of such horror stories, frustrations and injustices against landlords.
> It's just not worth being a small time retail landlord with your own money and personal financial well-being at stake (at least in these parts of Ontario).
> Unless you have a bunch of lawyers, goons and other kinds of "professionals" at your disposal, it's a suckers game.
> Buy units of a REIT and go back to bed....


I would agree after all the input; except that given REIT values, or the ones I know of at least, they are expensive, and if you worry about a market correction, you could loose a good amount of your principle if you end up needing to sell. But if you have no plans on selling, who cares how much of principle is lost as long as the yield does not also drop, especially if it is an ETF, likely it will go back up again at some point in time. If anything a price drop would be a buying opportunity.

From what I could find around Ottawa, prices are crazy compared to the rent to could get for the purchase price, unless you have a million or more to buy a larger unit complex. And there is a lot of talk about a housing price bubble coming in Canada too, so you could loose principle investment in buying real real-estate too. But again, if you are not planing on selling anytime soon, who cares.

If I had a good local ethical management company dealing with a rental property for me though, and cold actually make $ of the rental relative to price, I might go for the real real-estate. 

So in the end I guess I go bend towards buying REITs now and 'going to bed', maybe with the help of a sleeping pill or two. 

It's a tough one.


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## dogcom

I know people who are great tenants and for some reason and not a good one, they never bought their own place. They treat the house like they own it and the landlords are smart and do not raise their rents and sit back and collect the rent.

I would think there is a value to be added for good tenants that goes well beyond simply getting the most rent you can get, once you get one. Having people damage your house or the hassle of eviction I would think would cost a lot more then any extra rent you might get if good tenants leave.


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## Berubeland

HaroldCrump said:


> The real estate section of the CBO forum is full of such horror stories, frustrations and injustices against landlords.
> It's just not worth being a small time retail landlord with your own money and personal financial well-being at stake (at least in these parts of Ontario).
> Unless you have a bunch of lawyers, goons and other kinds of "professionals" at your disposal, it's a suckers game.
> Buy units of a REIT and go back to bed....


Even with the information I have given out I would still buy a property and rent it out. 

Buying an income property will almost certainly outperform a REIT. 

After working in buildings that allowed anyone with first and last in the door I can assure you about 95% of tenants will pay their rent.


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## HaroldCrump

Berubeland said:


> Even with the information I have given out I would still buy a property and rent it out.


But you are a professional property manager with (possibly) years of experience in this field. 
I am referring to a single individual property owner, esp. a retired one like the one in that news article.
The deck is stacked against her (and anyone like her(.


> Buying an income property will almost certainly outperform a REIT.


Yes, agreed, from a purely returns % perspective.
But that doesn't include all the hassle, sleepless night, botheration, etc.
How do you attribute or impute the cost of that?
Imagine what this poor landlord is going through.
I have been reading too many of such stories of hapless landlords on the CBO forums.
Maybe I am skeptical.


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## Berubeland

HaroldCrump said:


> But you are a professional property manager with (possibly) years of experience in this field.
> I am referring to a single individual property owner, esp. a retired one like the one in that news article.
> The deck is stacked against her (and anyone like her(.
> 
> Yes, agreed, from a purely returns % perspective.
> But that doesn't include all the hassle, sleepless night, botheration, etc.
> How do you attribute or impute the cost of that?
> Imagine what this poor landlord is going through.
> I have been reading too many of such stories of hapless landlords on the CBO forums.
> Maybe I am skeptical.


I disagree the deck is not stacked against her. I have met a landlord that picked her tenants using astrology for crying out loud. Small landlords as a whole can use a whole lot of getting familiar with their OWN business. 

You know when you hear these stories there is another side. I see many landlords try to rent stuff that shouldn't be rented, is illegal to rent and who are generally cruising for a bruising. 

That is really the reason I started my business. To bring the skills I learned working in rentals, collections and evictions in large buildings to small landlords. What I have found is that I am usually not very successful at getting these landlords to understand what their business is. They don't want to believe me. They want the money the tenants give but don't want to provide a good service. 

Currently for rent I have the following houses

Beautiful house - great location - smells of cat really bad I told the landlord to paint the room to get rid of the smell, still not done almost 2 months later, last time I met him there i told him he had to clean the cat feces out. 

Nice little house - decent location - original oil fired boiler smells of oil I explained to the owner she needs to change it, she can't afford it even thought I have had the house continuously rented for 5 years or so now.

Beautiful basement apartment - great location - no pets - no smoke - perfect credit over improved and over priced

Three Bedroom apartment - weird and small living room, no pets, no smoke, no kids, no laundry, no parking, perfect credit. I told this lady she needs laundry, people who have no car and who are renting a three bedroom want laundry on site. 

I am not a tenant advocate. I work for landlords. I only make money when I rent and if I pick bad tenants I have to kick them out again. Sometimes I refuse to rent places. A lot of landlords call me because they are scared to rent after a bad experience. I invariably see the same things. Poorly maintained dirty properties. Almost every time I go to list a house I have to ask the landlord to clean the house. These are basic things. I tell them a dirty house brings dirty people. Nothing I have learned in over 10 years of renting property has taught me how to convince a clean decent person to move in and spend even one minute cleaning other people's old filth. 

So I can't speak to this lady but I can tell you this a review is something very specific at the Landlord and Tenant Board. You review an order for an error of law and rarely does it stop the process of eviction. See even if the tenant applied to review her case she would be evicted before her review was granted. What it sounds like is happening is that her case is being delayed because of maintenance issues. When you have a maintenance issue attached to your arrears case it will be rescheduled many times because such cases are last for the day and usually there is time for only one such case per open courtroom per session. I just did a case like this it took from June and we still have not received the order for eviction. The tenant has left now. This particular house was very mouldy from day 1. 

Lawyers as a matter of fact know very little about landlord and tenant law. Paralegals do Landlord & Tenant Board matters, property managers and the landlords themselves. Lawyers not very much. Cases from the board can actually be appealed to the Ontario Supreme Court. Then you need a Lawyer. If you have a tenant who is on Disability or Ontario Works they can get free legal aid and appeal their case but this is very rare. 

I once had a case take 9 months. That case the old property manager who was fired but was still working for 2 weeks rented a house to a lady who had a drug problem and was a prostitute on Ontario Works. That case went to Osgoode Hall. I'll never forget our last court date was several days after September 11th she got this biker to come and say she was ministering to the victims of Sept 11th. It got kicked out of court but it took a long time. 

The worst tenants are the ones looking for problems so they can back out of paying. Like the ones who rented the mould house. They knew exactly what they were doing. I suppose if I wanted to with what I know about the law I could probably live rent free for a year.


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## Four Pillars

Berubeland said:


> ...
> You know when you hear these stories there is another side. I see many landlords try to rent stuff that shouldn't be rented, is illegal to rent and who are generally cruising for a bruising.
> ...


Very interesting stuff - feel free to keep sharing the horror stories.


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## lb71

Cal said:


> I thought I would post this article. Being a landlord either seems to be great or a nightmare.
> 
> http://cnews.canoe.ca/CNEWS/Canada/2010/01/07/12375051-sun.html
> 
> There seems to be many articles, postings, comments about the cash flow/investment side of rental property, but this covers the human side of being a landlord.
> 
> And yes...it isn't always like this. I have had some great tenants over the years.


I saw this yesterday and was shocked. I never wanted to get into the landlord business because of stories like this. My friend rents out his condo and he seems to get the pattern of good tenant, followed by bad tenant, followed by good tenant, etc. And he really does a thorough job of screening. His last bad tenant wasn't even the problem. It was his girlfriend, who didn't even live there, who called and complained about the smallest thing.


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## Cal

Berubeland - you should write a book of hints and stories about tenants and landlords, you seem you have alot of very interesting experiences with this.

Although as a generalization, a crappy place would definitely only bring crappy tenants, at least with a place in great condition you would have a chance of having great tenants.


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## iherald

Cal said:


> Berubeland - you should write a book of hints and stories about tenants and landlords, you seem you have alot of very interesting experiences with this.


Even an ebook would be useful! 

For those in Toronto or the GTA, there is the Landlord Self Help Centre. http://www.landlordselfhelp.com/intro.htm I've never used it, but the site seems good.


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## DavidJD

The most correct statement (of many good ones) is that being a landlord is a second job, and it is not always part time or ever convenient. 
I have owned a triplex for 14 years and have seen everything. Most people see rent cheques being deposited - simple. They are so naive. Trust me, there are MANY advantages to investing in REITS and would encourage others to do so. This is the advice I recommend all the time to those who want to repeat my 'luck'. When I meet someone who I believe has realistic expectations and are skilled enough to do well in RE investment, I discuss at a higher level and provide sound advice.

Personally I have had very positive experiences with tenants (two tenants came to my wedding and we remain friends) but a few have been horrible and made me question if it was not worth selling. When I discuss these with other LLs their horror stories seem much worse and would steer me clear of rentals.

Here is some sound advice.

Only buy a property that you would want your daughter to rent.
Do research on what the value of your unit(s) is on the market. Too high and people figure this out and leave, too low and you are wasting your time.
Don't lose focus of cash flow and keeping costs low.
Be proactive and visit your property often, contact your tenants regularly and respond immediately to their needs.
Try to do everything by email as these are invaluable when you have to go through a process with a provincial tenancies authority.
Budget for capital costs (new roof, etc)

Good luck.


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## ssimps

DavidJD said:


> Trust me, there are MANY advantages to investing in REITS and would encourage others to do so. This is the advice I recommend all the time to those who want to repeat my 'luck'. When I meet someone who I believe has realistic expectations and are skilled enough to do well in RE investment, I discuss at a higher level and provide sound advice.


Do you suggest buying REITs right now if you have cash and want to get into them? If so do you suggest going with a REIT ETF like XRE or some specific REIT stocks, and if the stocks, do you have any suggestions on which ones someone should consider looking at given today's prices?

I won't hold you to any of your recommendations should they fail. 

Thanks for your input.


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## Dana

iherald said:


> For those in Toronto or the GTA, there is the Landlord Self Help Centre. http://www.landlordselfhelp.com/intro.htm I've never used it, but the site seems good.


I am a member of the Landlord Self Help Centre and they rawk. I think a lifetime membership was around $100 and has been well worth it. I recommend it to any Ontario landlords out there.


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## Dana

DavidJD said:


> Do research on what the value of your unit(s) is on the market. Too high and people figure this out and leave, too low and you are wasting your time.


In addition to "comparison shopping" comparable rents in the area I also consult www.rentometer.com. I have found them to be quite accurate.


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## DavidJD

ssimps said:


> Do you suggest buying REITs right now if you have cash and want to get into them? If so do you suggest going with a REIT ETF like XRE or some specific REIT stocks, and if the stocks, do you have any suggestions on which ones someone should consider looking at given today's prices?
> 
> I won't hold you to any of your recommendations should they fail.
> 
> Thanks for your input.


Good point - I am not recommending when or what but simply that a return of 7%+ from a REIT is very worthwhile when compared to the returns of a rental property. If landlords like myself (non-professional property managers) actually calculate their true costs (opportunity as well as time) the returns are not that spectacular. When I ask myself if I could reduce my real return to a level of a safe REIT with reasonable growth in mind...I would opt for REITs and enjoy less responsibility and more time. My return and benefits have been higher than 15% but at an equivalent cost in resources over almost 1.5 decades. If RE is sought for diversification, a REIT does so and you never need to paint it

I am still investigating REITs and slowly buying some and watching several - no rush while learn. 

Personally I expect Income Trust investors to start picking them up and increasing their price as we approach the deadline of 2010.


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## Berubeland

Writing a book might even be therapeutic. 

One thing I did not mention before about selecting tenants. Your "spidey senses" are there for a reason. Use them, embrace them, listen to them. 

Whenever I have rented to bad tenants when I looked back I usually did have reservations that I shoved on the back burner. 

One guy I did rent to when I showed him the house he was following me around as is normal but the way the house is laid out it dead ends in a bathroom, as I was showing I had a very clear feeling of danger and fear for a moment. The thought crossed my mind for a fleeting moment that it was late and I was far from home and that in this windowless room all kinds of bad things could happen. I was quite shaken by it. Well anyways within the next few days he applied, had good credit, decent job, smoked outside so I ended up saying yes. So that was in February and everything went well until August. Then he stopped paying rent and basically started doing drugs not paying his rent.

So in this case there were no overt signs of any kind to indicate that he was a bad risk. So heed your feelings and use your intuition as well as do all the logical checking.


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## Dana

Berubeland said:


> Writing a book might even be therapeutic.


I would read it...


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## lb71

Just came across this article about problem tenants written back in November, which gives some good info for first time landlords.

http://network.nationalpost.com/np/...lem-tenants-a-landlord-s-worst-nightmare.aspx


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## Cal

Article on what you can and cannot ask for as a deposit:

http://www.moneyville.ca/article/924116--why-a-no-pet-rental-clause-is-unenforceable?bn=1


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## I'm Howard

The more I talk to people who Buy Rental Properties, the more convinced I become that REIT's are a better alternative.

XRE is, IMO, the best way to play the RE Rental market, unless you are using your basement to generate income to pay down a personal mortgage.


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## sprocket1200

our landlord for our business had horrible tenants, which was awesome as he was desperate to sell and we got a great deal on the building. got a good partner instead of tenants and now we are working together to upgrade it. i LOVE bad tenants and the opportunities they create...


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## ColdFire

Yes... I guess you can put a positive spin on bad tenant stealing money from landlords. I guess out of ashes comes new opportunities for growth.

Regardless, it's a shame the people can get away with this type of thing.


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## sprocket1200

ameliawalker said:


> This does not really happen all the time. It is a very seldom that you get a good tenant to be paying on time and treat the house as their own. Hopefully taking care of it as their own too. Though some would be really tough to be with. Especially those who would be difficult in paying.


I agree, it doesn't happen all the time, but it does happen lots. people rent for different reasons. much of it smart financial planning.

note the talk about the landlords being smart and not raising rents. what?! this is why right now it makes the MOST sense to rent. rents are way behind housing prices and the renters are totally winning. landlords are crazy to keep rents the same. this is why i strongly believe that our investments are best in equities. companies are made to make money.

now as a previous commercial renter, we always found ways to delay rental increases (commercial landlords know what they are doing). the last time we took 0% for two years then agreed to 6% for the final 3 years. people said we were crazy, but the never saw that is was all the same. as well we kept our money longer and looked for other opportunity. 

opportunity came in the form of buying the building and paying ourselves the rent. now, wanna know the first thing we did on our new 5 year lease? you got it, put increases in effective immediately!!

if only the other 'landlords' around us would do the same...


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## Fire Marshal Bill

dogcom said:


> I know people who are great tenants and for some reason and not a good one, they never bought their own place. They treat the house like they own it and the landlords are smart and do not raise their rents and sit back and collect the rent.
> 
> I would think there is a value to be added for good tenants that goes well beyond simply getting the most rent you can get, once you get one. Having people damage your house or the hassle of eviction I would think would cost a lot more then any extra rent you might get if good tenants leave.


I agree. I have 23 properties I am renting out since 1997 to good tenants. In 2009 when I was out of a job for 14 months, I never lost sleep even for one night. Every month, on the first, I got a pile of money for the rent and it was like staying home and being paid! I love it! In my view, forget stocks and other such schemes. I buy fixed assets and let someone else pay for my investment. Can you imagine any other scenario where someone else pays for YOUR investment? 

I thank God that I have always picked great tenants. In fact, this month, one tenant had only half the money on the first. I agreed to take the rest on the 20th without charging any interest. The goodwill I have created has caused my tenants to look after my properties like their own homes.


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## K-133

Fire Marshal Bill said:


> The goodwill I have created has caused my *tenants to look after my properties like their own homes*.


This to me has been the single most important attribute of a good tenant and tenant-landlord relationship.


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## I'm Howard

Renting to the Ski Crowd for three months brings in almost the same amount of money as renting a house to someone for a year, and they are only there two nights a week, a property Manager screens and does all the work, they just take a small commission and send you the cheques.

Family Renters take care of your place because if they get a bad rep, no one will rent to them.

My neighbours finance six months in the sun that way.


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## OhGreatGuru

*Default Pick your tenants wisely*



Cal said:


> I thought I would post this article. Being a landlord either seems to be great or a nightmare.
> 
> http://cnews.canoe.ca/CNEWS/Canada/2010/01/07/12375051-sun.html
> 
> ...


A real horror story. But how do you pick your tenants wisely in a day & age when any form of discrimination is illegal?


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## Berubeland

I have to agree with Fire Marshall Bill here. It's pretty obvious he knows how to pick the tenants and without looking at his properties I know that he has nice properties that are great to live in. 

I started my business 5 years ago now, I have been eviction free for 4 out of those five years. I got spanked when I was doing property management in Oshawa where I had one eviction for non payment of rent for a tenant I selected and she had paid the rent for a full year then she bought a car she couldn't afford and she got behind on her rent. I had a few people who just moved out too and I had to rerent for free there. 

The same year, I had a very bad eviction by a professional tenant in a substandard moldy property I should never have taken on. It took nine months to kick her out. Even after I evicted her, I looked at her application and tried to see if I could have done something different. She had perfect credit and she even had a guarantor because she was self employed. Fortunately the owner has seen it through and the guarantor is paying for everything. 

I'm not sure how many properties I've rented but it's a lot. If you want to avoid evictions this is how you do it. 

1 - Have good properties that attract good tenants
2 - Have a decent process for screening, I ask for photo ID, Pay Stubs and do a credit check. I don't care about references because who can't find 3 people to say they are OK? Even Ted Bundy could have had the staff from the rape crisis center he worked at say nice things about him. I don't care about landlord references either, if landlords have a bad tenant thats when they lie the most. I look at the credit check and see how long they live at their different addresses. If they move every 4-6 months they are likely being evicted. 
3 - Trust your gut. 
4 - Rent to nice people, there's more to life than the money and if you rent to a miserable *** even thought they pay the rent they'll make your life miserable. Case in point... tenant complains that their tap is broken, you arrange with the plumber for the next day and call the tenant, they inform you that you are not giving them 24 hour notice in writing which is required by law. You have to change the appointment, and write a notice in writing and deliver it to their door, then come back with the plumber. Life is too short to deal with these type of people. 

That's it. If you find that you're renting to bad tenants and some landlords do all the the time, your picker is broken. Find someone's who can pick good tenants for you and pay them.


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## AMABILE

How do you conduct a "CREDIT CHECK"?


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## Berubeland

There are services one of which is tenant verification service where small landlords can sign up and get access to credit checking services for $20 or so per check. 

http://www.tenantverification.com/ and there is no annual membership fee like with rent check. 

You do have to provide them with some documents that prove you own the house so it is best to sign up before hand then you will be ready to rock and roll when you get those applications


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## Jungle

This is a great thread. 

What would you experience landlords do if a tenant had almost 2 years of perfect record (no problems, no late rent) but then tenant's spouse suffers job loss and then missed rent on following month? 

Do you serve n4 the day after? 
Work out a late payment and do not serve n4? 
Serve N4 just in case, but work out payment ?


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## AMABILE

Can I conduct the credit check myself 
without going through the agency ?
What details are required from the tenant
(social insurance no. ...... date of birth)?


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## Berubeland

Amabile, 

You can indeed be approved to conduct credit checks yourself. First you have to be a member of Equifax or Transunion, You need to apply. Next they will conduct a survey of your premises. Then there is the annual fee of $240 to be a member and you still have to pay for about $12 for each credit check plus tax. 

You have to do an awful lot of credit checks for it to be worthwhile. If you are a small building it's still probably better to go with TVS. You may want the detailed credit reports in which case they can check your office and approve your security protocols.


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## Cal

Years ago, when I was looking to rent, with the help of a RE agent, the agent told me to get a credit report myself, then I would have copies to show LL's as needed.

(I got asked for it once, the agent showed them, they looked at it and handed it back, didn't even keep it on file or anything)


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## Berubeland

@ Jungle 

It takes about 4 months in Ontario to kick someone out. 

The first step is always to speak to them and the best time to do this is while giving them the N-4. It gives them 15 days to pay up. You'll likely find that he may already have applied to EI and is waiting the mandatory six weeks. Or started a new job and is waiting the 4 weeks before the first paycheck. 

I always take part payments especially if you have tenants that have been good for two years. This keeps the overall balance low and makes it easier to keep up. Tell them the truth that you don't want to kick them out but you have to start the process. 

For part payments I usually get email money transfer to save me from having to travel there for $200. 

Letting it slide can actually result in evictions. I just took on a property management client who is owed over $5000. His tenants have been there over 5 years. They were short here and there and he said he was ok. It added up and now they are unlikely to be able to pay all the arrears back. If he had given them the N-4 the first time they were late... they would have tried harder and they wouldn't be being evicted right now. 

Being a nice guy is actually being a bad guy sometimes.


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## iherald

Berubeland said:


> @ Jungle
> 
> It takes about 4 months in Ontario to kick someone out.
> 
> The first step is always to speak to them and the best time to do this is while giving them the N-4. It gives them 15 days to pay up. You'll likely find that he may already have applied to EI and is waiting the mandatory six weeks. Or started a new job and is waiting the 4 weeks before the first paycheck.
> 
> I always take part payments especially if you have tenants that have been good for two years. This keeps the overall balance low and makes it easier to keep up. Tell them the truth that you don't want to kick them out but you have to start the process.
> 
> For part payments I usually get email money transfer to save me from having to travel there for $200.
> 
> Letting it slide can actually result in evictions. I just took on a property management client who is owed over $5000. His tenants have been there over 5 years. They were short here and there and he said he was ok. It added up and now they are unlikely to be able to pay all the arrears back. If he had given them the N-4 the first time they were late... they would have tried harder and they wouldn't be being evicted right now.
> 
> Being a nice guy is actually being a bad guy sometimes.


The other option that I know Berubeland has recommended in the past is talking to the tenants and offering them out of the lease if they need to get a cheaper place. 

It can be easier than having to deal with the Landlord Tribunals.


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## Jungle

I see. So if you serve n4 and they give partial payment, do they still owe the full amount minus partial payment, within 15 days of serving the n4?


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## Berubeland

Yes, and Iherald is right too. 

If they can't afford it, many people just leave and you should encourage them to find a more sustainable place as their landlord. 

Yes, when you fill out the next form the L1 you report any payments. 

Also if they get the N-4 and are paying you can put off filing the N-4, Certificate of Service and the L-1 with the Landlord and Tenant Board in certain cases, like when the person has filed for EI it takes 6 weeks and they get all their back pay for those six weeks at once. So they can pay you. 

Also the Rent Bank provides interest free loans for those in trouble. 

I evicted a tenant I rented to once, her spouse had died and CRA seized all her accounts. She was very forthcoming, and showed us all her papers...the landlord let her stay after she could have been evicted. Nine months went by before she paid back all the money. 

Not every tenant is a tenant from hell or a psychopath, many just go through a bad stretch and catch up. Some don't manage their money well, break up with their spouse, lose work etc. Changing situations call for moving sometimes. 

As their landlord and housing provider your job is to protect yourself and mitigate losses so that you can afford to keep providing this valuable service.


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## chaudi

*pickup contractors wisely...*

http://www.thisislondon.co.uk/news/article-23374014-polish-decorators-down-tools-and-claim-squatters-rights-in-bankers-flat.do
Are the British completely insane?"


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## Berubeland

Clearly someone is insane  some days it's my turn.


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## chaudi

if the tenant doesn't pay you should contact them right away, even a bang on the door. Allow them 1 week if they don't pay then tell them right out that you will have to file for eviction. You should try and get them to sign the vacancy notice at that time.

Sounds obvious but i think many landlord go over board, once you start filing N-this and that you will be in for pain. But give it 2 week max.

Frankly i'm surprise how many LL want a year lease. Much better month to month for everyone, imo.


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## Jungle

With the Ontario system, it would be faster to evict tenants if collecting rent on a weekly or biweekly basis, no?


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## Berubeland

chaudi said:


> if the tenant doesn't pay you should contact them right away, even a bang on the door. Allow them 1 week if they don't pay then tell them right out that you will have to file for eviction. You should try and get them to sign the vacancy notice at that time.
> 
> Sounds obvious but i think many landlord go over board, once you start filing N-this and that you will be in for pain. But give it 2 week max.
> 
> Frankly i'm surprise how many LL want a year lease. Much better month to month for everyone, imo.


I have a tenant who moved into a property I manage, she couldn't find her check book. Then on the 23rd she told me she mailed checks, I don't have a check yet. She'd getting an N-4 tomorrow. Why waste 2 weeks? Believe me I'll be talking to her when I deliver it. She has a choice, she is not a child.


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## chaudi

well it is always better to mediate with some if possible. You have feel it out if they are playing a game or not. Once you file it will cost you more the person will probably take the system to the full extend. Which never works out well the LL. you lose 1-2 months rent minimum so it would better to get them to agree to vacate at a certain date, would save a lot of time.

btw, am i right, is it easy to get someone out if it is a month to month/ no lease vs a year lease. Or does it even matter?


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## Cal

http://www.moneyville.ca/article/947305--is-it-too-hard-to-evict-lousy-tenants


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## Jungle

The last rent cheque cleared, but the tenant says they are moving out soon. 

So I'm at a crossroads now. Do I get another tenant, or sell the place? To be honest, the yield is low, income tax is high and being directly affected by tenants' money problems, increases risk. 

I can get higher returns with less leverage in the stock market, without any one bothering me.

/disgruntled.


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## chaudi

ya i think so jungle at least in Toronto. I see the problem is with the stress for a landlord owning such a piece of property 450k and getting $2000 a month is around 5% return per year. It only makes sense if RE is going up like it has done for years. Like a stock it could go down, so you lose money if not you can lose your time and your sanity repairing clogged sinks etc. I think if you have 3 units or more it becomes like a part time job. A PT job that only pays 20k a year.


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## Jungle

Your yield example is simple to prove the point, but don't forget that once you factor in payment for property taxes, fire insurance, untilities, maintenance/repairs, vacancy and income tax, your yeild is almost cut in half. 

Some REITS are 6% right now. So in the case above, you could almost cut your leverage in half.


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## I'm Howard

Jungle is right, REITS, Professional Managemnet, No Hassle, Rent Cheque always arrives on time.

M, PFE, similar High yield US Stocks, now is a good time to buy with our strong looney.

JNK/NYSE also good place for your money.


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## marina628

Jungle said:


> The last rent cheque cleared, but the tenant says they are moving out soon.
> 
> So I'm at a crossroads now. Do I get another tenant, or sell the place? To be honest, the yield is low, income tax is high and being directly affected by tenants' money problems, increases risk.
> 
> I can get higher returns with less leverage in the stock market, without any one bothering me.
> 
> /disgruntled.


Jungle if you are not 100% sure you want to be a landlord I would sell it .If the property is in Toronto probably a good time to sell it and over last couple years probably have some good equity into it.


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## Jon_Snow

The more I investigate the idea, the less appealing the idea of being a landlord becomes... I guess some are wired for it - I'm not.


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## sprocket1200

Jon_Snow said:


> The more I investigate the idea, the less appealing the idea of being a landlord becomes... I guess some are wired for it - I'm not.


Jon, come on, go for it. with RE increasing by 25% or more a year, you can't lose!

what else would you do? buy a REIT and get 8-12% for doing nothing??


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## Four Pillars

Jon_Snow said:


> The more I investigate the idea, the less appealing the idea of being a landlord becomes... I guess some are wired for it - I'm not.


Same here.

I just don't see how it's worthwhile for a small property owner, unless they get a decent capital gain.


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## Berubeland

I'm in the game, and I can't tell you how many long time landlords have gotten out and sold their properties over the last 5 years. 

With the price of properties these days it doesn't make on whit of sense to rent houses out sometimes. 

I remember one landlord in an ok area, house paid off, he got $700 K for the house and I could only get him about $1600 per month at the time. This doesn't even factor in the risk of tenants, wear and tear. Plus...tenant quality has eroded as more and more people have bought properties. 

Still if you don't have much equity built up and have to move or something, it makes sense. Does it make sense to buy at today's prices to rent it out? Not really. But like so many have said transaction costs are so high with real estate that if it weren't for capital appreciation and just based on mortgage paydown you have to keep a property about 10 years to justify selling it. 

And I hate to mention it but in 2008 a whole lot of you were probably thinking well at least my house keeps going up and wondering why you ever bought stocks in the first place.


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## sprocket1200

Berubeland said:


> I'm in the game, and I can't tell you how many long time landlords have gotten out and sold their properties over the last 5 years.
> 
> With the price of properties these days it doesn't make on whit of sense to rent houses out sometimes.
> 
> I remember one landlord in an ok area, house paid off, he got $700 K for the house and I could only get him about $1600 per month at the time. This doesn't even factor in the risk of tenants, wear and tear. Plus...tenant quality has eroded as more and more people have bought properties.
> 
> Still if you don't have much equity built up and have to move or something, it makes sense. Does it make sense to buy at today's prices to rent it out? Not really. But like so many have said transaction costs are so high with real estate that if it weren't for capital appreciation and just based on mortgage paydown you have to keep a property about 10 years to justify selling it.
> 
> And I hate to mention it but in 2008 a whole lot of you were probably thinking well at least my house keeps going up and wondering why you ever bought stocks in the first place.


nope, was too busy buying deals while prices fell. will be doing the same thing when it happens to RE...


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## iherald

I own and live in a duplex, so I have tenants on my first floor. It's not difficult to deal with them, but it's also nice when there is a problem I can simply walk downstairs and knock on the door. 

I suspect, and I may be wrong, that because they know the 'landlord' is upstairs, I got a different set of people applying. They knew the place would be kept up, I'd be on top of problems but that I'd be on top of anything they do (literally in this case).


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## Jungle

Berubeland said:


> There are services one of which is tenant verification service where small landlords can sign up and get access to credit checking services for $20 or so per check.
> 
> http://www.tenantverification.com/ and there is no annual membership fee like with rent check.
> 
> You do have to provide them with some documents that prove you own the house so it is best to sign up before hand then you will be ready to rock and roll when you get those applications



Thanks for this great link. Have you used them before? Do they sell your information and solicit to you after signing up? 

Also, I don't have a phone or cell phone bill in my name. (It's in my wife's name) 

I wonder if they accept something else.


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## Berubeland

Hi Jungle, 

I have to pay obscene rates for credit reports, I have to pay a membership fee of $240 annually, plus $13 per credit check plus an inspection fee plus a deposit. 

Lots of owners call me and ask me if I can do their credit reports for them but I am not allowed according to the membership with transunion show the reports to anyone, not even the landlords that hire me. 

I'm able to say good bad or ugly to them but no details whatsoever. 

Having said this, I found TVS a while back, they don't ask for an annual membership fee just the credit checks you get. Most other services ask for an annual fee which I hate. If you need just one credit check it'll be like $75 which is outrageous.

Also jungle if you need leases and applications I can send you some.


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## Jungle

Ok thanks BB. I emailed them and they accept my wife's phone bill, but I had to include my marriage certificate. 

I have signed up and just waiting to get accepted. I should be ok for the rental applications, I have the TREB rental forms that I got off a realtor one time. 

Again thanks for your help. (wish me luck)


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## Jungle

Ok so I got accepted, you can do credit checks with Transunion and Equifax, which one do you choose?


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## Berubeland

Unfortunately I'm with Transunion, but I found out last year that they do not post Landlord & Tenant Board Judgements.

Equifax all the way! 

TREB Forms really suck  but it doesn't matter that much. 

What matters is that you ask for the following documentation... 

Photo ID, pay stubs (not job letters if possible). 

FYI 99% of landlords lie to get rid of a bad non paying tenant so their credibility is 0. People want me to do it so I do call them but it's pretty much useless. The bigger landlords don't even give references because of the Privacy Act. It's the same with other personal references. 

What I'm hyper alert for are lies and inconsistencies. For example if you say you have good credit but your credit is bad thats a turn down.If you tell me that your credit has issues and are honest, your chances are a lot better.You probably shouldn't tell me incredulous stories like you and your husband exchanged a kidney as well. (yes someone told me that)


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## Jungle

[email protected] kidney transplant. Interesting how you learn about all these problems in your tenant's lives..

Yea I kinda agree that previous landlord reference can be a wash. Anyone could fake being their pervious landlord and give a good reference. 

I will be asking for photo Id, pay stub and credit check. I'll go with Equifax. I can use both, but they both cost money. The TVS says you should go with someone that has a credit score above 600..less chance of default on payment.

Last time I did this, I had people scamming disability payments and the system, trying to rent, people that had NO job trying to rent... like how do you rent, if you have no job..? Either they don't understand or are trying to scam. You know, once your in, 8 months to evict. 

I swear next year I will sell the place and leverage the stock market. But then of course, you get a long term tenant that pays rent 5-10+ years and that would make me quite happy.


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## Jungle

How do you verify income if someone says they own a business?


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## Berubeland

Jungle said:


> How do you verify income if someone says they own a business?


I ask them to show me the money... they are then responsible for showing me savings, bank statements or something independently verifiable to prove they have the ability to pay the rent. 

Also decent credit. Although I must say that credit reports must be looked at in more depth than just score. 

More than 600 is ridiculous. This means that the person qualifies to buy the house and restricts your tenant pool way too much. I'll also look at history, so many many people screw up their credit after a single event such as divorce or loss of employment. Afterwards their credit may be very low, but once they are through their crisis they are very good payers. You can identify this type of scenario because prior to the event...they had excellent credit and they have no more events after.


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## Jungle

Thanks for your response. I visited the business owner's business. It appeared that pocketed quite a bit per month. I asked to see their tax return, but they were not completed yet. 

However she low balled me on the rent and I said no, I can not. Then she said her child may not like the basement. There was also a language barrier, so I was confused to be honest. I emailed them back to see if they were still interested and they did not respond.

I agree with what you say about the credit check, some people can mess their credit just from unfortunate circumstances. Best to look at the big picture. 

My god this has been very stressful and I have done over 11 showings in one week and turned down several people over the phone. I was supposed to collect deposit last Friday but the person backed out.. 

I am having a hard time finding the tenant that I want. I feel like for some people, I have to give them a surreal reality check on the phone. (ie you can't afford it, stay in your apartment. ) 

I want a tenant that can afford the house and be able to stay and not have to keep move out. The current tenant is leaving because they can not afford it. 

/ rant.


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## financialnoob

Jungle said:


> Thanks for your response. I visited the business owner's business. It appeared that pocketed quite a bit per month. I asked to see their tax return, but they were not completed yet.
> 
> However she low balled me on the rent and I said no, I can not. Then she said her child may not like the basement. There was also a language barrier, so I was confused to be honest. I emailed them back to see if they were still interested and they did not respond.
> 
> I agree with what you say about the credit check, some people can mess their credit just from unfortunate circumstances. Best to look at the big picture.
> 
> My god this has been very stressful and I have done over 11 showings in one week and turned down several people over the phone. I was supposed to collect deposit last Friday but the person backed out..
> 
> I am having a hard time finding the tenant that I want. I feel like for some people, I have to give them a surreal reality check on the phone. (ie you can't afford it, stay in your apartment. )
> 
> I want a tenant that can afford the house and be able to stay and not have to keep move out. The current tenant is leaving because they can not afford it.
> 
> / rant.


I can understand your frustration but don't give up and don't give in to temptation to fill the apartment with a tenant you're not comfortable with. That could cost you significantly more than a potential lost month of rent.


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## Berubeland

I can tell you it's not easy to rent a house... well sometimes it's easy but most of the time you really have to work it. 

You're getting too many showings raise the price. That's also why you're getting the riff raff. 

I hope you're allowing pets too, that restricts your tenant pool too much (over 50%) and there are many many respectful, responsible tenants looking for people who allow pets.


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## marina628

When looking at the credit report if it is old stuff I would ignore it but if they have new bad debt I would not take them as a tenant it shows they are having problems paying their current bills.
I found my last tenant on Kijiji ,they were looking for a house .Their credit score was not high but it was due to marriage breakup a couple years before .I would ask to see last year business taxes or get name of their accountant , if they don't have either I would not risk renting to a self employed person.


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## Jungle

Yea I might have to raise the price, I have heard a lot of comments from people saying it's fairly cheap. However I do not include utilities. My cash flow positive is small. A repair or vacancy will neutralize this. Plus I've spent over $100 now is gas and cell phone minutes calling people back.

I was speaking with another landlord in the area, his place was utilities included and his tenant was ringing up $500 water bills!! He could not understand how or why. But he was getting screwed over. 

I think the tenant demographic in the area challenging. I am accepting pets now as you suggest. I was worried because the previous owner's dog destroyed the lawn. It looked like a baseball diamond when I bought it. It took a lot of work to get that lawn green again. 

I have some good potential showings coming up with some candidates that seem very suitable. I had one earlier this week that really really liked the place. They were perfect for the place, but wanted to check out one more and said they will let me know. Regardless I still have a lot of interest, I think it's just a matter of waiting and time to get the right people for the house.


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## marina628

Jungle said:


> Yea I might have to raise the price, I have heard a lot of comments from people saying it's fairly cheap. However I do not include utilities. My cash flow positive is small. A repair or vacancy will neutralize this. Plus I've spent over $100 now is gas and cell phone minutes calling people back.
> 
> I was speaking with another landlord in the area, his place was utilities included and his tenant was ringing up $500 water bills!! He could not understand how or why. But he was getting screwed over.
> 
> I think the tenant demographic in the area challenging. I am accepting pets now as you suggest. I was worried because the previous owner's dog destroyed the lawn. It looked like a baseball diamond when I bought it. It took a lot of work to get that lawn green again.
> 
> I have some good potential showings coming up with some candidates that seem very suitable. I had one earlier this week that really really liked the place. They were perfect for the place, but wanted to check out one more and said they will let me know. Regardless I still have a lot of interest, I think it's just a matter of waiting and time to get the right people for the house.


We are required to pay the water Bill by our insurance company ,did you disclose to your insurance this is a rental?State Farm made this condition for us to get insurance.


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## Jungle

Yes the property is insurned as a rental property. Don't ask me what I went through to find someone to insure it 2 years ago. At that time, we were not married and with the condo, they wanted us to pay a MUCh higher seperate policy. I must have emailed 100 brokers shopping for the best rates. In the end, we were able find an insurance company that combined our condo, rental and car for great prices. 

The utility company said I am not allowed to put the water bill in the tenant's name. So it's just left in my name and the tenant pays it on my behalf. There is a risk here, but like I posted above, another landlord I spoke to was paying the water bill and the tenant was racking $500 bills. He must have been watering the lawn every day. I believe with out seeing and paying your own bills, you are not as accountable and conscience of utility usage.


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## Jungle

So I have been very busy over the last 11 days, with 15 showings and about 60 emails. Let's just say there is a need for rentals, in the area where the house is. However finding the right tenant is not easy. 

This experience has been.. overwhelming. But want to say a huge thanks to Marina for the advice  .. and the tips that Berubeland posted, I was able to attract better tenants than what I was receiving in the begining. 

So...I finally have a tenant now! I also was able to get more rent, thanks to the tips from the ladies above.  No vacancy either!!! 

Let's hope the pay the rent and do not trash the place. I do believe I picked a good tenant, but anything can happen. By choosing a well qualified tenant, I believe I have lowered the chances of bad things happening. 

Anyways, I guess I can have my life back. 

God bless them and please take care of my place, lol


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