Do you want to get controversial?
Go post something “discriminatory” in a public forum, and watch the complaints roll in!
I’ve been very vocal in the past about my belief that a landlord should be allowed to be selective while choosing a tenant, and not every tenant that submits an application should be considered “qualified.”
But today, I’d like to go through the items that most landlords look at when considering a tenant…
Seriously – are you guys watching the World Cup?
I don’t get it.
I mean, I played soccer my whole life, and I loved the sport. I played in two leagues as a child every season right up until 18-years-old, as well as for the high school team, but I don’t understand the sport as it is today.
The World Cup has shown us (in between a few guys taking really hard fouls and actually getting hurt) just how phony and pathetic these con-artists can be.
They dive, flop, fake, fall, moan, groan, clutch, and cringe.
And then thirty seconds later, after the referee has refused to call a foul, they magically get up and play on, when they were previously exhibiting a gentle death rattle.
The most avid soccer fans argue that diving is “part of the sport” and that it’s “strategic.” If you think that, give your head a shake.
Then on Tuesday, we saw Luis Suarez BITE an opponent!
And more incredible than the bit itself is that this is the third time he’s bit an opponent in the last four years. Check it out HERE.
Why am I talking about soccer on this blog?
Well for one thing, it’s in the headlines every day! But I guess I wanted to see what kind of backlash I get for saying anything negative about the sport.
If you take something that people are so passionate about, and say something contrarian, you’re bound to get a response.
And that brings me to the subject of tenancy in Ontario, and the potential discrimination that some people feel is present when a landlord doesn’t want to lease his or her property to a given tenant.
When I wrote an article on this subject for The Grid last year, I was crucified by the readers, and I received complaints to my brokerage, through RECO, and one person even called the Canadian Human Rights Commission.
On my blog, however, about 95% of the comments agreed with me: that in a capitalistic democracy, where an individual takes the risk to purchase a piece of real estate for monetary gain, that person should be permitted to be selective with the tenant that he or she chooses.
There are always extremes.
“Gays, Blacks, and Jews need not apply.”
Yeah, we get it.
But when I suggest that I don’t want to rent to two 22-year-old frat-boys, with sideways hats, wearing “TapOut” t-shirts, and giving each other fist-bumps, am I really being discriminatory? Or am I just looking out for my investment?
Agree, or disagree. It’s up to you.
But here are, whether you like it or not, the top ten items that a landlord will consider for a prospective tenant.
This is the first, and most important, item that landlords will look at.
Sure, they might want to know who you actually are. But whether your name is John or Bob, and whether you work in North York or the Beaches, the landlord really only cares about how much money you make.
They care about how much money you make because it’s a window into who you are as a person, how you spend your time, and how trustworthy you can be. But their primary concern should be looking at your ability to pay your rent each month.
Just as a mortgage lender looks at GDS and TDS ratios to see what a borrower can quality for, a landlord will look at the ratio of total rent to gross income. Most use 30%, but in today’s market, that number can get a lot lower!
The last unit I leased for a client was for $1,500 per month, and the lessee made $105,000 per year. That’s 17%, and it shows how tough the rental market can be for a lessee.
2) Credit Report
It’s sad, but your FICO score often defines you as a rental candidate.
If you’re the kind of person that signs up for a Mastercard outside the Air Canada Centre so you can get a crummy t-shirt that you’ll never actually wear, then your credit rating stinks. And you know what? It should. Because it shows you make terrible decisions regarding debt, and you’re more likely to spend your disposable income on a new purse than you are to responsibly pay your rent on time.
The highest FICO score I’ve seen in recent memory is 825. The lowest I’ve seen is 550, and this belonged to a 20-year-old kid who wanted to rent a place and I told him, “Unless you get both your parents to co-sign for this, and agree to meet the landlord in person, and maybe give them 6-months rent up front, you have no chance.”
I know, I know, you’re going to tell me that it’s illegal to accept six months’ rent up front. But we’re having a mature conversation about what really goes on in the REAL world, not in theory.
A low FICO score can be a deal-breaker to many landlords, even if you have high income, and a stable job.
Many landlords put way, way too much stake into the credit report.
Here is where the list starts to go from “there’s no problem looking at these items,” to “wait a minute, what are you really looking at?”
Is it reasonable to look at somebody’s employment? Absolutely.
Is it discriminatory to suggest that you want to rent to a “white-collar professional” as opposed to a grave-digger or garbage-collector? Absolutely.
But landlords will look at your current employment, and you never know what they’re looking for.
They typically want to know where you work, how long you’ve been there, and perhaps get a sense of how stable your job is. The last thing the landlord wants is an out-of-work tenant.
But they’re also using your employment, and your employment history, as an indication of who you are.
Completely discriminatory, but completely acceptable within the rental community.
If you believe this is 100% blatant discrimination, no matter what, and there’s no arguing my way out of this, then tell me with a straight face that you don’t have a preference between these two rental candidates:
1) A 32-year-old married couple who work downtown
2) A pair of 19-year-old male students who attend Ryerson
Tell me you have no preference, and I won’t believe you.
I don’t want to paint all 20-year-olds with the same brush, but aren’t two 20-year-old male students more likely to pee off the balcony, throw beer bottles off the rooftop terrace, and have wrestling competitions on the hardwood floor than the 32-year-old married couple?
5) Rental History
The landlord wants to see where you’ve lived in the past, and maybe find out why you left.
If you’ve been in four downtown condos in the last four years, that raises a red flag for two reasons:
1) It shows there’s a good chance you’ll be leaving this condo in a year, and the landlord will have to spend time and money to find a new tenant
2) There’s a reasonable chance that you left four condos in four years because you’re a problem.
The landlord should investigate, but might not, depending on how the other items in this list check out.
But it happens all the time.
As I said with “Age,” some landlords just don’t want to rent to two male jocks.
Maybe two young female students from another country whose parents sent them here to do nothing but study will be a better fit for the landlord?
Is that really all that discriminatory?
I would estimate that 5% of Realtors actually call the references provided on a rental application, and probably only 40% of landlords do as well.
Most landlords just want to see who your references are.
If you put your mom and dad down as your two references, or somebody with the same last name as you, then perhaps it shows you’re too young to actually know people out there in the world.
No landlord likes a high-maintenance tenant, and often they’ll try to weed these folks out at the onset.
Any “Offer To Lease” is going to include a Schedule A and a Schedule B, just like an “Agreement of Purchase & Sale,” that corresponds to the lessee’s clauses and conditions, and the landlord’s clauses and conditions respectively.
If the tenant is asking that the unit be freshly painted, the carpets steam-cleaned, the holes in the walls patched up, the leaky faucet fixed, the towel-rack tightened, the air ducts cleaned, and a host of other items, then there’s a good chance that this is a bad tenant.
Last year, I recieved this little ditty from a cooperating agent:
“….She mentioned that the A/C unit in the condo has to be cleaned on a yearly basis (usually in the Spring) & for the past 2 years the Board of Directors took responsibility for it, but 2013 was the final year. The Board recommend a company called NU Air and the cost is about $100 for the cleaning of the unit. So she was wondering if the owners were aware of that change and if they would be doing those yearly A/C unit cleanings?”
This was just ONE of about a half-dozen “suggestions” that the tenant had for my landlords, and my landlords said, “This chick is way too high maintenance; let’s move on.”
9) Marital Status
There is nowhere that this item appears on a rental application, as it would be absolutely discriminatory. But landlords will ask, and many of them will evaluate.
Read into this however you like, as it’s tough to get into the mind of a landlord who is often looking for things that aren’t really there.
10) In Person Meeting
I once told a cooperating agent that my landlords wanted to meet his tenants in person for a chat.
The cooperating agent said, “You’re opening a serious can of worms here. If your landlord meets with the tenants, and he doesn’t end up renting to them, then he’ll have a serious discrimination suit on his hands!”
I didn’t take that comment seriously.
Imagine the time and money that would go into this “suit”?
Some people live in a theoretical world, and some live in reality.
And while many of the items on this list seem discriminatory, and while many of them definitely are, in reality, there’s very little a prospective tenant can do about it.
If a landlord met with a prospective tenant and found he or she to be too young, too rude, too arrogant, too dirty, or a multitude of different things, and decided not to rent to this person, then that’s just the way things go.
Don’t shoot the messenger, folks.
I didn’t put this list together because I’m in complete control of the world’s rental market, and I’m out to crush the little guy.
This list represents, through my own experiences representing both landlords and tenants, the most common items that landlords focus on when choosing a tenant.
Now if you’ll excuse me, I have to go watch Greece vs. Ivory Coast. I hear a player tripped over his own foot, and was awarded a penalty shot that decided the game with 60 seconds let. WHAT A SPORT!!!