Real Estate

Renting to International Students

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  • Mar 5th, 2020 10:07 am
[OP]
Member
Feb 7, 2018
229 posts
294 upvotes

Renting to International Students

Q here for landlords renting out to international students. How do you go about assessing credit worthiness or ability to pay? Since you can’t pull credit check - do you ask for proof of funds to cover 1 years rent, or an additional deposit to secure the lease? Not looking to discriminate here - but how are you to assess risk when the basic tools at your disposal aren’t applicable in this situation.
16 replies
Deal Guru
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Mar 23, 2008
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Edmonton
wiab89 wrote: Q here for landlords renting out to international students. How do you go about assessing credit worthiness or ability to pay? Since you can’t pull credit check - do you ask for proof of funds to cover 1 years rent, or an additional deposit to secure the lease? Not looking to discriminate here - but how are you to assess risk when the basic tools at your disposal aren’t applicable in this situation.
You might want to provide a location. Different jurisdictions have different rules. In Ontario, for example, you can't legally ask for a deposit more than the last month's rent. If you do get someone to agree to give you a larger deposit, they can turn around as soon as they move in and get the LTB to make you give it back. Leaving you unprotected again, with tenants who know how to work the system to their advantage.

And what good does "proof of funds" do at the start of the lease? Maybe daddy sticks their bank account with all their money for the year, and they blow it in the first 2 months. How did seeing "proof of funds" help you there?

Don't have a solution for you, but you're in the high risk/(hopefully) high rewards market.

C
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Mar 27, 2004
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Toronto
This is a common occurrence. A landlord cannot require a tenant provide more than first and last months rent. But the Tenant can voluntarily offer more months of rent, i.e., last 3 months of rent. You have to put in your agreement that the tenant has voluntarily agreed to provide more months. This is perfectly legal.
Full-time Realtor
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Dec 4, 2004
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GTA
oasis100 wrote: This is a common occurrence. A landlord cannot require a tenant provide more than first and last months rent. But the Tenant can voluntarily offer more months of rent, i.e., last 3 months of rent. You have to put in your agreement that the tenant has voluntarily agreed to provide more months. This is perfectly legal.
That's not entirely true, at least in Ontario. While the prospective tenant can offer more than the legally allowable deposit, after the lease is signed, the tenant can ask for the extra deposit back and the landlord would be required by law to refund it. A clause in a lease agreement that is not consistent with the RTA (in Ontario) cannot be enforced, even if originally it was voluntarily agreed to by the tenant.
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Mar 23, 2008
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_dc_ wrote: That's not entirely true, at least in Ontario. While the prospective tenant can offer more than the legally allowable deposit, after the lease is signed, the tenant can ask for the extra deposit back and the landlord would be required by law to refund it. A clause in a lease agreement that is not consistent with the RTA (in Ontario) cannot be enforced, even if originally it was voluntarily agreed to by the tenant.
There is precedence for it.
https://www.canlii.org/en/on/onscdc/doc ... nsc985.pdf
https://www.thestar.com/business/person ... front.html

The key in this case seems to be that it was OFFERED by the tenant, not demanded by the landlord. Even then, I wouldn't be surprised if a tenant (especially an international student unfamiliar with Canadian laws) was able to argue that the deposit was given under duress (won't get the unit if they don't give it) or they didn't understand their rights. You'd want any any contract clause to include something like "I understand that as per the RTA Section blah blah, I am not required to give a deposit of $xxx, I am voluntarily providing a deposit of $xxx."

C
Jr. Member
Jun 15, 2015
183 posts
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Thornhill, ON
wiab89 wrote: Q here for landlords renting out to international students. How do you go about assessing credit worthiness or ability to pay? Since you can’t pull credit check - do you ask for proof of funds to cover 1 years rent, or an additional deposit to secure the lease? Not looking to discriminate here - but how are you to assess risk when the basic tools at your disposal aren’t applicable in this situation.
Well, let's put it this way: I have not met too many local renters who drive a porsche.
Jr. Member
Nov 14, 2016
157 posts
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Toronto
Most international students come here to eventually get a PR and Canadian citizenship. They prefer not to get involved with any activities which could jeopardize their chances of getting rejected due to criminal cases against them, etc. A lot of them come from countries like China, India, Bangladesh, Philippines, etc where the police and judicial system are not as fair as here so they are generally afraid of police and any kinda legal institutes like LTB or courts.

Here are some pros and cons of renting to students -
Pros -
- They pay more than what a local family would pay as they would share the place with other students
- They would vacate the place when you want them to vacate without getting involved into legal hassle like going LTB, etc. With families there is always a risk of them not vacating when you want vacant possession. At the max they would leave at the end of their 2 yr studies term for job or immigration to other cities and provinces
- You don't hve to have everything in a tiptop or working condition. e.g. you can hve old appliances in working condition and students won't complain

Cons -
- You won't hve a reference or credit check if they are 1st sem students. In that case, you have use your best judgement and interview them in person. If they have rented elsewhere, ask for reference and call the landlord or even visit in person.
- A lot of them get used furniture and matresses etc from senior students or relatives and that could cause infestation
- They don't know the local rules and regulations and canadian way of life so u will hve to baby sit them for a while. Examples i hve seen myself - using boiling water to melt snow off the stairs instead of shoveling. Throwing garbage and kitchen waste in recycle bin, etc. Setting temp on thermostat too high coz they r not used to cold.
-
Member
Aug 22, 2016
352 posts
198 upvotes
toradian wrote: Most international students come here to eventually get a PR and Canadian citizenship. They prefer not to get involved with any activities which could jeopardize their chances of getting rejected due to criminal cases against them, etc. A lot of them come from countries like China, India, Bangladesh, Philippines, etc where the police and judicial system are not as fair as here so they are generally afraid of police and any kinda legal institutes like LTB or courts.

Here are some pros and cons of renting to students -
Pros -
- They pay more than what a local family would pay as they would share the place with other students
- They would vacate the place when you want them to vacate without getting involved into legal hassle like going LTB, etc. With families there is always a risk of them not vacating when you want vacant possession. At the max they would leave at the end of their 2 yr studies term for job or immigration to other cities and provinces
- You don't hve to have everything in a tiptop or working condition. e.g. you can hve old appliances in working condition and students won't complain

Cons -
- You won't hve a reference or credit check if they are 1st sem students. In that case, you have use your best judgement and interview them in person. If they have rented elsewhere, ask for reference and call the landlord or even visit in person.
- A lot of them get used furniture and matresses etc from senior students or relatives and that could cause infestation
- They don't know the local rules and regulations and canadian way of life so u will hve to baby sit them for a while. Examples i hve seen myself - using boiling water to melt snow off the stairs instead of shoveling. Throwing garbage and kitchen waste in recycle bin, etc. Setting temp on thermostat too high coz they r not used to cold.
-

That is a hell lot of research on international students. I love the - Setting temp on thermostat too high coz they r not used to cold. I would add - which leads to high condensation, and that leads to mold.
Jr. Member
Nov 14, 2016
157 posts
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Toronto
arbytor wrote: That is a hell lot of research on international students. I love the - Setting temp on thermostat too high coz they r not used to cold. I would add - which leads to high condensation, and that leads to mold.
Exactly! And then try explaining the black thing on the wall and wet corners in the room to them. Grinning Face
Member
Nov 22, 2010
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One more thing- you rent to 4 students and later on find 10 students staying there;)
Deal Guru
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Mar 23, 2008
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new936 wrote: One more thing- you rent to 4 students and later on find 10 students staying there;)
And as long as they're not violating any health regulations, there's nothing you can do about it.

OP, some of the others make a good point about utilities. You don't want to include those in your rent.

C
[OP]
Member
Feb 7, 2018
229 posts
294 upvotes
Hi guys thanks for the help & suggestions. Should have included location as @CNeufeld pointed out, I’m in Ontario. Also it’s a condo apartment so the utilities are covered in the condo fees, and we will do inspections every 2 months to avoid the 10 people in a 2 bed apartment issue as best as possible.
Deal Addict
Apr 5, 2016
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Calgary/Vancouver
wiab89 wrote: Hi guys thanks for the help & suggestions. Should have included location as @CNeufeld pointed out, I’m in Ontario. Also it’s a condo apartment so the utilities are covered in the condo fees, and we will do inspections every 2 months to avoid the 10 people in a 2 bed apartment issue as best as possible.
You have to give notice before you inspect and they will clear out extra stuff to their friends house before you come in.
Current Fido and Rogers customer.
Ex Koodo customer.
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Dec 30, 2012
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Toronto
Some foreign nationals have increased likelihood of leaving the country without paying. Look up Chinese birth tourism and hospital fees. If the foreign renter skips town you’ll never be able to recoup the money from him/her.
Deal Expert
Jan 15, 2006
15050 posts
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Richmond Hill
As stated you cannot request for more deposit, but note even if stated the tenant volunteered to give more deposit they have the right at anytime to request it back. During due diligence I suggest my landlords to carefully review their CANADIAN back records to see how much and how often the tenant is receiving money from abroad. My most recent one was a student just finishing high school and this September will be going to York. Condo for rent was $2100/mth plus hydro for a 1 bedroom. His bank statements showed he was receiving $20,000 every 3 months or so for the past year and he also suggested on his own to pay more deposit. Also have a face to face with the student to get a feel.

In general International students are ok, they don't want trouble themselves here.

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