I have rented to six Unpleasant and one Awful tenant. This is out of the hundreds of times I have rented our apartments over the last seven years. 
The thing is, during the screening process I knew four of the six were going to be unpleasant (the unpleasantness of the other two surprised me). And the awful tenant? We’ll get to her later.
Before the reference check:
During all of my interactions with a new prospect I seek to gather as much information as possible. Some of the info I want to know is:
• where did they live before?
• why are the moving?
• where do they work?
• how long have they been there?
• what did they like about their last place?
• what did they not like?
I then use this information and their application form to place them on the Tenant Suitability Scale.
Reference Check:
The reference check is used to confirm or adjust my initial assessment of the prospect’s placement on the Tenant Suitability Scale. Once I’ve confirmed their position on the Tenant Suitability Scale, I decide if I am going to rent to them using on this table:
| Tenant Suitability Scale Rating | Rent to them? |
| Perfect 1% | Yes |
| Excellent 10% | Yes |
| Above Average | Yes |
| Average | Judgement Call |
| Below Average | Judgement Call |
| Unpleasant 10% | No |
| Awful 1 % | No |
Warning:
You will feel pressured to rent your apartment if it has been vacant for a while. It will be easy to justify that that an unpleasant or awful tenant won’t be that bad and you can handle it. Remember, It WILL be that bad, and you don’t want to have to handle it. If you have someone who is potentially an Unpleasant or Awful Tenant, move on – even in the face of money pressures – and keep searching. Leave the unit empty until you find a suitable tenant who will cause you fewer headaches.
Five Questions to Ask:
The five questions I ask to assess the prospective tenant are:
1) Will they pay the rent?
2) Will they take care of the apartment?
3) How will they be to deal with as a tenant?
4) Do they meet the other criteria?
5) What does your gut say?
Question 1: Will they pay the rent?
On your application form, ask where they work, how long they’ve been there, and how much they make monthly. You could also request to see a pay stub or other proof of income.
To figure out if they will pay the rent, I look at two components:
1) Can they afford the rent?
To determine this I look at:
Reliability of paycheck:
There is a big difference between incomes if someone is receiving $3,000 a month from CPP or Social Security, or are making $3,000 a month lobster fishing. You know the tenant with the pension will get their money every month, no questions asked. However the lobster fisherman will be flush in lobster season and on unemployment in the off-season.
Total gross monthly income:
CMHC has identified people to be at risk if they spend more than 30% of their pre-tax income on housing, this number includes rent, heat, lights. (source)
I use the following criteria for assessing tenants:
| Rent Ratio | Rent to them? |
| Under 30% | Yes |
| Between 30 and 35% | Risky |
| Over 35% | No |
Calculating rent to income ratio
The formula to calculate their rent ratio is:
Rent (including heat, lights and hot water) / Total Gross Income of all tenants (income before taxes are deducted)
Consider three prospective tenants for a $1,150/month apartment, everything included:
Tenant A has a total gross monthly income of $4,000. Their rent to income ratio is:
1,150/ 4,000 = 28.75%
The rent is 28.75% of their total gross income. They can afford the rent.
Tenant B has a total gross monthly income of $3,000. Their rent to income ratio is:
1,150/3,000 = 38%
The rent is 38% of their total gross income. They can’t afford the apartment.
Tenant C has a total gross monthly income of $3,500. Their rent to income ratio is:
1,150/3,500 = 32.8%
The rent is 32.8% of their total gross monthly income – they are risky.
If you determine they are in the risky category move on to assess the next few factors.
How they spend their money
This is all gathered through observation. Things to look at here are the car they drive. Is it a brand new car? Is it an older car? Do they have the newest flashy phones? Do they smoke a pack of cigarettes a day? Did they show up with $6 lattes from the local coffee shop? None of these are positive or negative on their own, but they do provide some insight into their priorities with regards to their money, and collectively they can reveal spending priorities and financial habits.
Their credit score
Do a credit check. Include language on your application form that allows you to do a credit check. Note: There is a charge for completing a credit check.
2) Have they paid their rent in the past?
If they didn’t reliably pay their last landlord they will probably not reliably pay you. The only way you will know this is by calling their previous landlords. Click here for more information on how to do a reference check with previous landlords.
Question 2: Will they take care of your apartment?
I need to quote Dr Phil here:
The best predictor of future behavior is relevant past behavior. #DrPhil
— Dr. Phil (@DrPhil) March 24, 2014
This absolutely applies to tenants. If they’re not taking care of their current place they’re not going to take care of your apartment. How to check to see if they take care of their current place?
Ask their previous landlord.
See below for more information on talking to their previous landlord.
Drive by their current place to look at the outside.
Take a drive by their current apartment. Is the landscaping maintained? Is there garbage outside? Are there broken toys on the front lawn? Are the curtains in the window on straight? Is how they are maintaining their current unit in line with the condition your want your apartment to be kept in?
Drop off a form or pick something up from them.
Call in advance to make sure they are home and stop by to drop off a necessary form or to pick up their application form. This should give you a chance to peek inside their house. Use most of your senses when you are there. How does it smell? Is it tidy, or filthy? What do you hear? Video games blaring, kids screaming, dogs barking or nothing? Would you touch anything? Ultimately, would you be happy if your unit was maintained in this condition?
You don’t need to taste anything – that would be gross.
Question 3: How will they be to deal with as a tenant?
You can get this information from two sources:
1) Previous landlords
Ask their previous landlord. See below for more information on talking to their previous landlord.
2) Your own interactions with them
Did they show up on-time for your appointments? Did they listen to the rules and regulations as you spoke? How did they react to the rules and regulations? Were they courteous? Did they pull in to the driveway with their music blaring? Did they complain about their previous landlord or roommate? Did they seem entitled to your unit? How they behave during your screening and initial conversations is a good indicator of how they will behave when they are a tenant.
For example, one prospect was rude, gruff, and dismissive towards me during our first meeting. I didn’t pick up on this enough, and rented to him. Guess what? After he moved in, he was rude and dismissive to his neighbors, me and our staff. I ended up evicting him after his wife had a run-in with another tenant, and he told me in no-uncertain terms if it happened again he would be kicking down doors and the other tenants would only be leaving in an ambulance. Yes, he was one of the Unpleasant Tenants.
Question 4: Do they meet your other criteria?
Make a list of all the other criteria you have for your unit. Verify you are in accordance with all the laws and rules of your province or state and aren’t discriminating against any one.
Some other criteria to think about are:
- Pets. Do you allow pets or not? If so, what kind of pets?
- Smoking. Yes or no?
- Income requirements
- Community fit. You probably don’t want a family of four living above a nurse who does shift work.
Question 5: What’s your gut saying about them?
Trust your gut and your intuition. If your gut is saying something is off or just doesn’t feel right, listen to it. Spend a bit more time investigating them, or think about what could be off. For example, if your research reveals the information that they gave you is untrue, inaccurate, or otherwise “not quite right,” that’s a sign they are being cagey or worse. At the very least, if your gut is saying something is off, stop, pause, and remember the warning from above – renting to an Unpleasant or Awful tenant will be unpleasant or awful.
Calling previous landlords
When I call the previous landlords, I make my calls with Awful tenants in mind. I assume Awful tenants will get their friends to lie to allow their horrendous tenant behavior. With that in mind, I do these three things:
- Always ask for a minimum of two previous landlords.
On your application form have the spot for current landlord, and a spot for previous landlord, no matter how long they have lived at their current place. - Call their previous landlord, not their current landlord.
Call their previous landlord and you will get a more honest and dependable answer. If they are an Awful or Unpleasant tenant, their current landlord will want to get rid of them and could tell you what you want to hear so you’ll take them as a tenant. Their previous landlord doesn’t have to worry about being stuck with that tenant anymore. - Ask about the apartment instead of saying I’m doing a reference check.
For example, you need to do a reference check on Tom who lives at 123 Fake St. When you call, don’t lead off saying you’re doing a reference check. Instead ask them for information on their unit at 123 Fake St. A typical conversation starts like this:
L: Hello?
A: HI, I’m calling about your apartment at 123 Fake St.
L: I’m sorry, it’s already rented. / Yes, it is still available.
A: Great, Thank you. Well, my name is Andrew Cameron. I’m actually calling to do a reference check on Tom Smith, he applied for one of my units.
What you’re trying to determine is that the unit at 123 Fake St. actually exists, and that the “landlord” isn’t actually one of their friends lying for them. The goal is if it’s a friend that’s lying for them, asking about the unit out of the blue will trip them up and expose the lie.
Questions:
After you’ve established they are a legitimate landlord, ask your reference check questions. Based on my experience, some questions you want to ask are:
- How was their payment history?
- How happy were you with the condition they kept your apartment in?
- How were they to deal with as a tenant?
- What else should I know about this tenant?
- Would you rent to them again?
Then ask appropriate follow up questions, or add other questions that are important to you.
It is necessary to ask these questions as open ended ‘How…? questions, not ‘Did they pay their rent on time?’ or ‘Did they keep their apartment clean?’ You want to elicit more information from this landlord to confirm or refute what the prospect has already told you. Open ended questions will provide the opportunity for more follow up.
It is as important to pay attention to how they answer the question of whether they’d rent to them again. Did they pause for a while to think about it before saying yes? A quick excited “Absolutely!”, a “Yeah, sure.”, and an “I suppose I would” are three entirely different responses, especially when the tone is considered. These non-verbal cues can also provide valuable insight into the landlord’s opinion of tenant.
Landlord Groups
I am also a member of a Facebook group consisting of local Landlords. Everyone in the group is able to ask each other about prospective tenants to get another opinion on the applicant. Try to find a local group like this, or start one if it doesn’t exist.
Pulling this reference check together
Step 1: At the showing, have the applicant either fill out your application form, or give them a form to take with them to complete and return.
Step 2: Make notes on all the other information you gathered and impressions that had during the meeting so that you don’t forget them. Place the tenant on the Tenant Suitability Scale.
Step 3: Wait 24 hours and review the information before completing the reference check.
Step 4: Start with the steps in the reference check process that won’t cost any money or take much time.
- Review their income to rent ratio and reliability of pay cheque.
- Review the interactions with the tenant to see if you misinterpreted their actions.
- Review that they will meet the other criteria and that they would be a good fit for that unit.
- Call their previous landlord.
- Check in with your gut.
At this point you should have confirmed or adjusted your initial placement of the tenant on the Tenant Suitability Scale. Make your decision based on the following chart:
| Tenant Suitability Scale Rating | Decision |
| Perfect, Excellent, Above Average | Say Yes |
| Unpleasant, Awful | Say No |
| Average, Below Average | Get more information |
To gather more information about the tenant, move on to:
5) Driving by their current unit
6) Stopping in at their current unit
7) Completing a credit check
Once you have all this information you will need to make a judgement call on these tenants.
Why the extra scrutiny on Average and Below Average tenants?
It’s about reducing risk. If you mis-categorize an Excellent tenant, then at worst they are a Below Average tenant, but more than likely an Average tenant. If you mis-categorize a Below Average tenant they may be an Unpleasant tenant, or at worst an Awful tenant.
Turning someone down:
If someone doesn’t pass your reference check, call them back and in a straightforward manner say, “Thank you for your application. I’m sorry. You do not meet our criteria at this time.” Do not offer any more clarification or information than this and end the conversation as soon as possible.
My Unpleasant and Awful tenants
We had some vacancies and I felt pressure to fill the apartment. That is when I got in to trouble and rented to our Unpleasant and Awful tenants. For the Unpleasant tenants during the screening process I knew four of the six were going to be Unpleasant. I knew this and still choose to rent to them. My previous warning was correct: It was unpleasant dealing with them.
The two tenants that surprised me were:
- A couple that moved in and appeared to be Excellent tenants. Then I found out that he was never happy where he lived, and typically blamed his unhappiness on his neighbours. Ten months after they moved in, he was fueding with his neighbours and moved out.
A little more scrutiny would have shown that he had moved twice in the previous year. - A woman moving to town to move in with her boyfriend. Only after they had both moved in did I learn they she was 19, this was her first apartment, and she had met online three months previously. Plus the job she thought she had in town was not a firm commitment but a “we’ll see when you get here”. Oh yeah, and she resolved any conflict by yelling and verbally abusing him.
If I spent more time investigating I could have found this out before and made a more informed decision on renting to them.
Now for the Awful tenant. When she finally moved out she owed us only two and a half months rent. This was after two and a half months of promising us that the money would be in next week. There was garbage on the back deck, a broken door casing, a fridge and stove that hadn’t been cleaned in months, and the place smelled like a litterbox. We had to spend DAYS airing out the apartment before we could even get to the scrubbing and cleaning. The whole apartment had to be repainted. It was an absolute waste of our time and money. We got lucky – it was only two and half months’ rent and all the damage could be fixed in a few days. We didn’t have to re-do gyrpoc, replace floors, or buy new appliances. It could have been infinitely worse. I know some of you have experienced much worse.
I bring this Awful tenant up because it could have been avoided by doing more research before renting to her. Two weeks after she moved our cleaning lady said, “Did you rent to her? You know they kicked her out of her last place because of the filthy state her unit was in?” If we had found this out three weeks before we could have avoided this whole mess.
By using this reference check process, you are likely to dodge the bullet of renting to Awful and Unpleasant tenants. I’d like you to avoid the time spent scrubbing, the cost of repainting, and the mental anguish of dealing with Unpleasant and Awful tenants. It is much easier to grow your business, focus on your family, or enjoy life when you’re not stressed about your tenants, worried they are going to destroy your apartment, or whether you will get money from them.