Real Estate

Red flags for tenants

  • Last Updated:
  • May 12th, 2019 10:37 am
[OP]
Member
Mar 18, 2015
221 posts
176 upvotes
Mississauga, ON

Red flags for tenants

So I have a rental house.
I've got an offer, but the rent is more than 50% of their take home pay. The guy has very good credit scores.

Is this the big red rejection flag? Or is this becoming the norm for rentals in the GTA?
17 replies
Deal Guru
Feb 29, 2008
14221 posts
10525 upvotes
What are his assets and how much does he have in the bank. This would be a no for me as there are plenty of qualified tenants out there. Why not make it easier on yourself and keep looking?
Jr. Member
Oct 26, 2006
173 posts
17 upvotes
Markham
I'd wait until you find someone who can "afford" the rent. You have to look at the whole picture....credit score isn't always everything.
Sr. Member
Jun 7, 2017
965 posts
721 upvotes
BC
JayLove06 wrote: What are his assets and how much does he have in the bank. This would be a no for me as there are plenty of qualified tenants out there. Why not make it easier on yourself and keep looking?
How much does he have in the bank? F U is how much.
Deal Guru
Feb 29, 2008
14221 posts
10525 upvotes
Furcorn wrote: How much does he have in the bank? F U is how much.
Then rent something cheaper. Why would a landlord risk renting their place to someone who can't afford to make the payments from their salary alone?
Deal Fanatic
Dec 6, 2006
5111 posts
1457 upvotes
Toronto
Bad credit score is a red flag. But good credit score is not a go-ahead flag on its own either.
Can be very low income but have a bunch of small bills/ accounts that been paying on time for a few years.
Deal Fanatic
User avatar
Sep 8, 2007
9004 posts
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Way Out of GTA
Probably he will split it up and rent out rooms. Good luck getting him out.
Deal Addict
Sep 22, 2013
2286 posts
1433 upvotes
I used to own a rental property and had rented to someone in the same ‘situation’. She clearly could not afford the rent.

It went as you thought it would. Payments were almost always late, always a different excuse. Sometime rent would be paid in parts.

It was just a disaster.

We ended up having to go to the LTB to have her evicted and even then it was ridiculous. Had to have the hearing rescheduled to another location to work better for her schedule and then she didn’t even bother to show up.

This was after having tenants who basically just destroyed the place.

Word of advice...do you due diligence in finding a proper tenant because if you don’t you will really regret it.
Deal Guru
Feb 29, 2008
14221 posts
10525 upvotes
OldMarriedGuy wrote: I used to own a rental property and had rented to someone in the same ‘situation’. She clearly could not afford the rent.

It went as you thought it would. Payments were almost always late, always a different excuse. Sometime rent would be paid in parts.

It was just a disaster.

We ended up having to go to the LTB to have her evicted and even then it was ridiculous. Had to have the hearing rescheduled to another location to work better for her schedule and then she didn’t even bother to show up.

This was after having tenants who basically just destroyed the place.

Word of advice...do you due diligence in finding a proper tenant because if you don’t you will really regret it.
This. Tenants don't even realize we ask to see so much because the laws do not protect us. We have to do everything we can to vet tenants, especially now. If a tenant doesn't like it then he/she can kick rocks.
Deal Addict
Sep 22, 2013
2286 posts
1433 upvotes
JayLove06 wrote: This. Tenants don't even realize we ask to see so much because the laws do not protect us. We have to do everything we can to vet tenants, especially now. If a tenant doesn't like it then he/she can kick rocks.
Yep, not to mention always having to repaint, recarpet and replace doors/brand new appliances...etc.

It’s like people feel like because they pay rent this can treat the place like shit.

Why are you slamming every door (including appliances) to the point of where everything is broken and then you complain about it?

It’s appaling at some of the stuff ‘landlords’ have to deal with.

I tried it for a few years and I don’t have the stomachnfoe it unfortunately.
Last edited by OldMarriedGuy on May 11th, 2019 8:28 am, edited 1 time in total.
Deal Guru
Feb 29, 2008
14221 posts
10525 upvotes
OldMarriedGuy wrote: Yep, not to mention always having to repaint, recarpet and replace doors/brand new appliances...etc.

It’s like people feel like because they pay rent this can freak the place like shit.

Why are you slamming every door (including appliances) to the point of where everything is broken and then you complain about it?

It’s appaling at some of the stuff ‘landlords’ have to deal with.

I tried it for a few years and I don’t have the stomachnfoe it unfortunately.
You sound like my wife. She tried the landlord thing for a couple years and hit the eject button. It’s not for everyone.
Deal Addict
Apr 6, 2008
1807 posts
1152 upvotes
JayLove06 wrote: You sound like my wife. She tried the landlord thing for a couple years and hit the eject button. It’s not for everyone.
Agreed. It's like running your own business. You can sink, swim or tread water. Some people do well and others end up losing their shirts. Don't blindly follow the "become a landlord and be set for life" mentality.
Newbie
User avatar
May 10, 2019
1 posts
This is becoming more common in the GTA and even Hamilton. I use their credit score to decide
Joel Ferraro Renovations and Rentals
Toronto Hamilton Waterdown
Deal Fanatic
User avatar
Sep 8, 2007
9004 posts
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Way Out of GTA
Joelferraro25 wrote: This is becoming more common in the GTA and even Hamilton. I use their credit score to decide
Credit score while very important, is one key piece of the puzzle. You've still got to look for other red flags....social media, condition of the vehicle (if the interior of their car is dirty, they aren't going to keep the place clean), potheads, potential for pets the week after they move in. Sometimes people are able to somehow manage a decent but not great score and the other redflags would combine to make you choose someone else.

I do expect when the next left wing govt gets in they will outlaw credit checks as some sort of invasion of privacy and shut off supply. Then use that as justification for full on govt housing.
Member
Feb 7, 2018
313 posts
410 upvotes
I would look at more than just the 50% of TH ratio. Bigger red flags would be contract job/self-employed, having a car and trying to rent a place with 50% of TH, poor credit, having child support payments, pets, age of tenant, prior references, if they have family in the area, how they dress/speak.

Reason why I’d advocate for looking past % of TH is that a single young professional making 60k/year will take home around 45k (3750/mo). Assuming a rent at 1/2 their TH (1875/mo) that leaves them with 1875 for all other expenses which is extremely reasonable even for people who aren’t super good with money. If they had a car then I’d say hell no, unless the rent was closer to 30% of their TH. Again not hard and fast numbers, do the math and add buffer - but also you have to go with your gut feeling.

Good luck
Member
User avatar
Dec 17, 2009
241 posts
165 upvotes
But what is his actual take home? If the guy is taking home $10k a month, spending more than 50% on rent should be no problem at all.
Member
User avatar
Jan 7, 2019
320 posts
306 upvotes
I would say, do your due diligence. If you feel like something is off then don't rent it to them.

1. What do they do for a living? Professional or multiple part time jobs.

2. Ask for a job employment letter and call their HR to confirm. Are they in good standing at their company?

3. Credit scores can be easily faked through photoshop. Do not believe it 100%

4. Interview them

5. Are they searching through a realtor? or was this off craigslist?

6. Google search them

7. Get two pieces of ID, one with photo on it. If they don't pay rent on time, report it to Transunion/equifax and mark it on their credit history.
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