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Three things all Renters need to know

Three things all Renters need to know

You’re ready to dive in and rent your first (or second, or third) property in Toronto. Having had represented Landlords, scrutinized Tenant applications and advised on who to accept and reject, we thought we’d share a few tips on how to be successful or at least increase your probability of renting your next home.

The process is fairly simple. You decide to rent. You look at homes. You find one you love. You offer and submit your application with supporting documentation. They accept your application. You book a moving truck and pay your friends in IOUs that you don’t really have any intent of fulfilling and then you give them beer and pizza when they are done moving. They, in turn, bang the crap out of your stuff and do a mediocre job of moving, which likely is done knowing they are never going to get any of the IOUs you’ve promised. Overall, it’s a good experience that you don’t want to have to repeat too often.

When the market is as hot as it is now, people come to us seeking reprieve from the repetitive losses they’ve experienced. Oftentimes, after reviewing their incomplete supporting documents or lack thereof, it becomes clear as to why they’ve been unsuccessful. Below, we offer a candid discussion about why it’s essential to prepare these items before you being viewing properties.

What are ‘supporting documents’ that accompany an offer to lease?

  1. An employment letter
  2. A credit report
  3. A rental application

As mentioned, the process of finding a home isn’t always the challenge. Submitting a successful offer (especially in a heated market) can be. Here’s what’s happening behind the scenes after you submit your offer to the Landlord and their representative.

Your employment letter/Source of Income

Show me the money. That’s it. I need to know where you generate revenue. If you have alimony payments, disability payments, an incredible job or you’re IG famous with deep sponsorship.

If you’re not employed, it may be a challenge getting your application accepted. The solution may be to have a parent co-sign the lease agreement.

Your Credit Report

This pesky little report really stings some people. Remember when your mom, dad or teacher told you to pay your bills on time? This is when it can matter.

When I read these reports, the R1-R9 and O1-O9 ratings matter immensely. I look for missed payments, a history of late payments, bankruptcy claims and I even cross-reference some of the other information on your report to make sure there isn’t any funny business or contradictions. If I feel like you’re lying to me, chances are I’m going to tell the Landlord to reject your application. At minimum, I’m going to ask additional questions if I feel like something doesn’t jive.

I also use your report to calculate G.D.S and T.D.S. ratios. These are the same stats/figures that the banks use when they are evaluating someone buying a house/applying for a mortgage. 

If your Gross Debt Service (G.D.S.) exceeds about 32-36% of the rent, I might be reticent to give you my stamp of approval. The same goes for your Total Debt Service (T.D.S.) but I may stretch as high as 42-45%. I want to know if renting this apartment will consume too much of your salary. I also evaluate if your monthly debt payments (i.e. student lines of credit, phone payments, credit card payments, etc.) coupled with your rent payment are too high based on your salary.

The bottom line is that a good tenant pays their bills. Even if it is just the minimum amount, pay them. It’s not that difficult if it means you cut your triple-pump, hazelnut unicorn latte for two weeks. If you experienced a series of unfortunate events and missed a few payments, but have a legitimate reason for missing them, I might let it slide. Life happens. Crappy things happen and things get missed. But if you are dodging payments repeatedly, I’m going to see it on your report and will once again, I will advise my client not to work with your offer.

Your Rental Application

This is super easy. It’s a rental application. It tells me where you last lived, your landlord’s name, contact info for a few personal references and whether or not you have a car. The most important component is your previous landlord. If they are willing to give a reference letter and provide a phone number so I can call them to ask a few questions, that is fantastic. Your personal references are great but let’s be honest, you’re not likely going to put down a name of someone who isn’t going to tell me you’re a rockstar and that your only fault is you’re ‘too clean’ or you’re ‘a perfectionist who loves to scrub toilets’. That previous landlord, however, is more likely to paint a realistic picture. And yes, I am going to search them on the Land Registry system to ensure they actually own the property. I’ve had people use their friends as ‘landlords’ in the hope that I won’t find out. If you’re reading this, it didn’t work out for you, did it Steve? Yeah, your friend was like a deer in the headlights when I called and put him on the spot about being your ‘Landlord’.

One final piece of advice about applying to rent an apartment and increase your chances of success – give your social media handles. If you’re really ‘too clean’ and ‘love to scrub toilets’, let me see your IG handle or MySpace profile (hehehe). I’d love to hear what others have to say and more importantly, your photos. You’d be surprised how often we find people who describe themselves quite differently than what their photos depict. If you like to light your pants on fire after 17 shots of tequila most weekends and it contradicts what you’ve told us, chances are we’ll take this into account when considering your application.

Happy home hunting.

B.

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