When you invest in a new property, finding reliable tenants is crucial to ensuring a steady stream of rental income, and the overall success of your investment. This is especially true if you are buying a house with tenants already in place. Whether you are purchasing a rental home, apartment complex, or commercial space, we can help equip you with the knowledge you need to find the right tenant, and secure your financial future.
Maximizing Occupancy: A Guide to Securing Tenants
In order to maximize the cashflow of your investment property, you should attempt to maximize its occupancy rate. Very few properties operate at a 100% occupancy rate. In fact, many of the most successful rental properties will hover around the 93-97% range. While you may not be able to guarantee a perfect run of tenants, here is how you can improve your odds:
- Assess Existing Tenants (If Applicable): When buying a house with existing tenants, begin by evaluating the current occupants. Review their lease agreements, rent payment history, and any outstanding maintenance issues. Determine whether their presence aligns with your investment objectives. If the existing tenants are reliable and meet your criteria, it may be wise to retain them, as it can save you time and resources compared to seeking new tenants. However, if you have concerns about the current tenants or wish to implement changes, consider your legal obligations and consult with a legal professional.
- Conduct a Thorough Property Inspection: Whether you're dealing with existing tenants or starting fresh, a comprehensive property inspection is essential. Identify any maintenance or safety issues that need to be addressed before tenants move in. A well-maintained property not only attracts tenants but also reduces turnover and potential legal liabilities.
- Determine Your Ideal Tenant Profile: Define the type of tenant you want to attract. Consider factors such as income level, lifestyle, and rental history. This profile will guide your marketing efforts and tenant screening process, helping you find tenants who are more likely to be a good fit for your property.
- Offer Tenant-Friendly Lease Terms: To attract tenants, consider offering lease terms that are appealing. Flexible lease lengths, inclusive utility packages, or pet-friendly policies can make your property more attractive. However, ensure that these terms align with your investment goals and local regulations.
- Provide Excellent Customer Service: Good communication and responsiveness are essential for securing and retaining tenants. Promptly respond to inquiries, schedule viewings at convenient times, and maintain a professional and friendly demeanor. If you're buying a house with existing tenants, introducing yourself and demonstrating a commitment to their well-being can foster goodwill and cooperation.
- Streamline the Application Process: Make the application process as efficient as possible. Use online application forms to simplify the submission and review of tenant information. Set clear criteria for tenant qualification, including income requirements, credit scores, and rental history. Transparency and consistency in the application process help build trust with potential tenants.
Step-by-Step Tenant Acquisition for Newly Acquired Properties
Once you’ve completed the purchase of your new property, and tied up all administrative loose ends, it is time to begin the tenant acquisition process. By following a few simple steps, your house will be ready for renters in no time.
- Prepare the Property: Whether you're buying a house with tenants or acquiring a vacant property, it's essential to ensure that your property is in the best possible condition. Make any necessary repairs, clean thoroughly, and consider freshening up the space with a coat of paint. A well-maintained property not only attracts tenants but also allows you to command a higher rental rate.
- Know Your Market: Understanding the local real estate market is key to setting competitive rental rates and targeting the right audience. This applies whether you're buying a house with tenants in place or starting fresh. Research comparable properties in the area to determine the market rate for rentals. This will help you price your property competitively and attract potential tenants.
- Market Your Property: Use both online and offline marketing strategies to get the word out about your property. Create an appealing listing on popular rental websites (Zillow, Vrbo, etc.) use social media (Facebook Marketplace, etc.), and consider local advertising. High-quality photos and a detailed description can make your property stand out from the competition, whether you're buying a house with tenants or without.
- Screen Applicants Thoroughly: When you start receiving inquiries and applications, it's crucial to have a thorough tenant screening process in place. Check their credit history, employment status, rental history, and references. A background check is also advisable to ensure you're renting to responsible individuals, especially if you're buying a house with tenants and need to assess the existing tenant's suitability.
- Host Open Houses: Hosting open houses or property viewings can be an effective way to showcase your property to potential tenants, whether you're buying a house with existing tenants or without. It allows them to get a feel for the space and ask questions in person. Be prepared to provide information about the property and the rental terms.
- Promote Tenant Retention: Securing tenants is just the first step. To maintain long-term occupancy, provide excellent customer service, respond promptly to maintenance requests, and make sure your tenants feel valued. Happy tenants are more likely to renew their leases, whether they are existing tenants or new ones.
- Offer Incentives: To attract tenants quickly, consider offering incentives such as a discounted first month's rent, free utilities, or other perks. These can make your property more appealing and give you an edge in a competitive market, especially if you're buying a house with tenants and wish to retain them.
By following all of these steps, you are likely to find a good tenant for your property. If you are still struggling, however, there are even more avenues you can potentially explore.
Expert Tips for Finding Renters for Your New Investment
If you are still struggling to find renters for your new property, here are a few additional steps you can take to broaden your reach:
- Hire a Property Management Company: If you're buying a house with existing tenants or acquiring a property with tenants in place, consider hiring a property management company. They can handle the entire rental process, from marketing to tenant screening and ongoing property maintenance, making the transition smoother.
- Network with Real Estate Professionals: Establish connections with real estate agents, brokers, and property managers in your area. They can refer potential tenants and provide valuable insights into the local market, which can be particularly useful when buying a house with existing tenants.
- Stay Informed About Local Laws: Familiarize yourself with local rental laws and regulations, including fair housing laws. Compliance is essential to avoid legal issues and maintain a positive landlord-tenant relationship, whether you're buying a house with tenants or starting fresh.
- Use Technology: Take advantage of property management software and online platforms to streamline the application and leasing process. These tools can help you manage applications, collect rent, and communicate with tenants more efficiently, whether you're buying a house with existing tenants or without.
In order to make the tenant acquisition process as seamless and stress-free as possible, you may also want to consult a trusted mortgage broker. When determining the terms of your mortgage on the rental property, a Clover Mortgage broker can help you ensure that your monthly payments remain affordable, even in the absence of tenants. To learn more, check out our guide on applying for a rental property mortgage, or contact us to schedule a free consultation today.
How do I find tenants?
First, ensure your property is in good condition and ready for occupancy. Make any necessary repairs, clean thoroughly, and consider repainting if needed. A well-maintained property is more attractive to prospective tenants. Then, decide on the rental terms, including rent amount, lease duration, and any additional conditions (e.g., pet policies, utilities, and maintenance responsibilities). Research the local rental market to determine a competitive rental rate. Price your property in line with similar rentals in the area to attract potential tenants. Once you have determined your terms, develop an appealing listing that includes high-quality photos, a detailed description of the property, and a list of amenities. Emphasize what makes your property unique and attractive.
Can you evict tenants after purchasing a property in Ontario?
If you buy a house with tenants, can you kick them out? The short answer is no. You must respect the lease of any existing tenants until the end of their lease term. If you plan on removing tenants after purchasing property, all you can do is deny a lease renewal request after their current lease has expired. Of course, some leases will have special provisions for early termination. It is important to carefully review the lease of current tenants to determine whether early termination is an option (for instance, if the property was purchased to be demolished), and if so, what the proper procedure for tenant notification will be.
What happens if my landlord sells their property?
The landlord is required to inform you of the impending sale of the property. The notice must include the name and contact information of the new property owner or their authorized representative. The terms of the existing lease agreement, including the lease duration, rent amount, and other provisions, generally continue to be in effect after the sale. The new owner typically assumes all the rights and obligations outlined in the lease. This means that your lease remains valid, and your tenancy usually continues uninterrupted. However, there are situations where the new owner may have valid reasons to terminate the lease. The new owner or their immediate family may intend to move into the property, the property may require significant renovations that would be difficult to carry out with tenants in place, the property is being converted to a non-residential use, etc.