Real Estate

How common do tenants not pay rent

  • Last Updated:
  • Dec 8th, 2020 5:57 pm
[OP]
Deal Addict
May 23, 2006
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Vancouver

How common do tenants not pay rent

Heard some horror stories and got advice to do proper screening and background check on tenants.

But, how common do tenants not pay rent? is it rare?

New landlord here; would be great to hear the experience from others.
26 replies
Member
Dec 12, 2011
203 posts
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Toronto
Screen very carefully. A mistake is so costly when you are a landlord. Also, this post covid era with so much economic uncertainty, things are more riskier than ever. One would also have to assume tenants are failing to pay rent more often than before the pandemic. Just do a google search and you can see this happening all over. So this is the new normal now. Things will be different going forward than they were before so nobody can give you a straight answer.
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Sep 16, 2009
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Fantastical wrote: Heard some horror stories and got advice to do proper screening and background check on tenants.

But, how common do tenants not pay rent? is it rare?

New landlord here; would be great to hear the experience from others.
My opinion is that it is rare - but its based on good properties in good areas. The better places have poor yield and higher quality tenants. The worse properties - more so location than condition, and there are many sub optimal neighborhoods, have worse tenants that can give you issues. Most people (tenants/landlords) are decent human beings. There will always be some idiots that just dont want to pay - just screen them out. Use your gut as much as you use your paper screening. Generally speaking families and couples are better tenants than collection of single people. Students are a toss up.

The one thing that is probably more unpredictable is how they will keep the place. Harder to establish patterns there.
Newbie
Aug 8, 2008
22 posts
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Vaughan
Whenever I handle a lease for one of my clients, I always get as much information regarding the potential tenant as possible. There's no way you will ever regret asking for a full and complete rental application. Always do your due diligence. Ask for confirmation of employment, confirmation of income, and references. Verify all of these.
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Nov 13, 2013
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oasis2002 wrote: My opinion is that it is rare - but its based on good properties in good areas. The better places have poor yield and higher quality tenants. The worse properties - more so location than condition, and there are many sub optimal neighborhoods, have worse tenants that can give you issues. Most people (tenants/landlords) are decent human beings. There will always be some idiots that just dont want to pay - just screen them out. Use your gut as much as you use your paper screening. Generally speaking families and couples are better tenants than collection of single people. Students are a toss up.

The one thing that is probably more unpredictable is how they will keep the place. Harder to establish patterns there.
Mostly agree but disagree with your family/single breakdown. I find students pretty reliable. If I have a cheap 3 bedroom renting for $1500 I’d rather have 3 students than a family they can only afford that kind of rent but has two kids.

At the lower price point some people flat out can’t pay. No moral judgement but it happens. Food will take priority especially now because you can’t kick them out.

There are also higher end tentants that stop paying. Sometimes well screened ones even. It’s good to budget for a few months of missed payment for empty units.
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credit report will tell you a lot...
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Jul 17, 2008
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Only hire people with govt jobs. No point in taking risks with others
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Messerschmitt wrote: Only hire people with govt jobs. No point in taking risks with others
Even they don't pay rent. Rare, but I've heard it...which is stupid because they typically make good money and are very easy to find in case you have to garnish their wages or sue them.
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May 12, 2014
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Fantastical wrote: But, how common do tenants not pay rent? is it rare?
No. Obviously, in every business, the overwhelming majority of people pay. Otherwise the business wouldn't work.

But you have to remember that even in the best of cases, humans get affected by illness, job loss, divorce, fraud, and all manner of other issues. These problems are not rare.

In these cases, their problems can quickly become your problems, even if the person has the best of intentions.

And that doesn't even cover fraud or just living beyond one's means.
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FrancisBacon wrote: No. Obviously, in every business, the overwhelming majority of people pay. Otherwise the business wouldn't work.

But you have to remember that even in the best of cases, humans get affected by illness, job loss, divorce, fraud, and all manner of other issues. These problems are not rare.

In these cases, their problems can quickly become your problems, even if the person has the best of intentions.

And that doesn't even cover fraud or just living beyond one's means.
These things are unerstandable though and I think most landlords can work with a tenant to a certain point. But I'm talking about the tenants who just flat out not pay because they don't want to. These people do not deserve any excuses.
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Fantastical wrote: Heard some horror stories and got advice to do proper screening and background check on tenants.

But, how common do tenants not pay rent? is it rare?

New landlord here; would be great to hear the experience from others.
Its actually pretty uncommon. You only hear of the bad stories. Never the good ones.

Also keep in mind... cheaper rentals come with cheaper tenants and their problems. People with unstable income, low income, etc.

Just think of it logically. Ever see those huge 10+ story high rise apartment buildings? Do you think most of the people there don’t pay rent? Nah.. they all do except for the rare bad apples.
Otherwise people/corporations wouldnt be owning these buildings!
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UrbanPoet wrote: Its actually pretty uncommon. You only hear of the bad stories. Never the good ones.

Also keep in mind... cheaper rentals come with cheaper tenants and their problems. People with unstable income, low income, etc.

Just think of it logically. Ever see those huge 10+ story high rise apartment buildings? Do you think most of the people there don’t pay rent? Nah.. they all do except for the rare bad apples.
Otherwise people/corporations wouldnt be owning these buildings!
Face With Tears Of Joy You have no idea.
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Mar 2, 2017
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True horror stories like tenants staying in your place squatting for months on end not paying are rare (haven't personally experienced this, I only know of a handful within my close circle/clients)

What's more common is a tenant breaking a lease early because of a financial situation and leaving the premises not fulfilling the entirety of the lease. Usually no point to chase them around and usually it's easy to find a replacement tenant (pre covid).
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JayLove06 wrote: These things are unerstandable though and I think most landlords can work with a tenant to a certain
Yes absolutely. I just wanted the OP to budget accordingly because from his bank's/wife's/budget's point of view, all non payment will have the same impact no matter the cause.
UrbanPoet wrote: Just think of it logically. Ever see those huge 10+ story high rise apartment buildings? ...
The big difference is that if 5% of tenants in a high-rise don't pay, maybe the company goes from slightly profitable to slightly money losing.

If a guy with a tight budget and a duplex gets that one bad tenant, and if even worse the tenant trahses the place, they could go bankrupt.

If the risk was one in a million, or even one in a thousand, then maybe not so bad. But the risk of non payment is much much higher. Probably low single digit percent depending on your specific sub market.

And even worse: if you don't screen, by definition you will attract a higher percentage of problems (as those applicants will have been rejected by people who do screen).
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Fantastical wrote: Heard some horror stories and got advice to do proper screening and background check on tenants.

But, how common do tenants not pay rent? is it rare?

New landlord here; would be great to hear the experience from others.
According to your profile, you're in Vancouver so the housing laws are different there. If you were in Quebec, I would generally advise against being a landlord as laws in Quebec generally favour tenants. For example, in Quebec, landlords can't ask for more than the first month's rent when the lease is signed (so no security deposit or last month's rent).
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Jan 26, 2004
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My tenants stopped paying rent since march. I followed each and every policy as per law, issued notices etc. Till date owes me 20k plus (yes twenty thousand canadian dollars).

I wasnt able to pay mortgage for the house and defaulted twice with the bank. Had to borrow money from a 3rd party at 24% apr.

I filed case with tenant board, took 9 months for hearing, where i was automatically assumed bad villain because im landlord and landlord are evils. Tenant still get to stay in the house.

Feel sorry for my next tennant coz im not going to be very nice landlord going forward.
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Jan 15, 2010
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Why not just sell the place and avoid the predatory 3rd party loan? You're risking foreclosure as well.
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Feb 7, 2018
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Generally-speaking, higher priced rentals have less tenant abuse than the more affordable ones. With a higher price you’re typically screening in people with professional jobs that depend on decent credit scores/references and screening out those who would have less to lose by non-payment. Although as others have stated, COVID and Ford have empowered more than one tenant to just stop paying even when they haven’t lost their job or anything.
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Oct 14, 2010
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Toronto
wiab89 wrote: Generally-speaking, higher priced rentals have less tenant abuse than the more affordable ones. With a higher price you’re typically screening in people with professional jobs that depend on decent credit scores/references and screening out those who would have less to lose by non-payment. Although as others have stated, COVID and Ford have empowered more than one tenant to just stop paying even when they haven’t lost their job or anything.
Curious as to what would you start calling a higher priced rental? Reason I ask is because the avg rent/month already seems high.
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JayLove06 wrote: Face With Tears Of Joy You have no idea.
I do actually. I managed a high rise apartment building gears towards the “hard to house” for a few years. These are homeless people, drug addicts, life time welfare/odsp recipients.

The arrears rate (even for this subset of the most bottom of the barrel type tenant) was actually very low considering the type of tenant. Same with the eviction rate.

I know this is rfd. So its all about evil landlord vs evil tenant bears.
But out in the real world... people choose to cover housing related cost above all else.

The issue seems to be well thought out rental management vs amateur rental management.

Even with delays (speaking from the perspective of a pre-covid world... bc the world with covid is just fcked), its actually pretty quick to kick out a problem tenant. Even in the worst case case scenario. As long as affairs are properly managed.

We used to kick out problem tenants in 90 days flat. Even pregnant ones that get beat up and literally stabbed with knives by their drug addict bf’s... (they have great sob stories which gives them leeway with the LTB). It only ever got that bad because her bf’s kept flashing guns @ the other tenants. Hows that for experience dealing with bad tenants. :lol:
Last edited by UrbanPoet on Dec 8th, 2020 2:18 pm, edited 1 time in total.

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