signs your tenant is going to leave
I have had many people ask me about signs their tenant is going to leave. I usually get asked when it is too late.
For example: a tenant might ask a landlord or property manager something like:
How much notice do I have to give to get out of my lease?
Can I use you as a referance for an apartment I am looking at?
The big question I ask to landlords and property managers is, what are you doing to proactively keep your tenants?
In my opinion tenants rent for location and lifestyle first, then the unit / building, then the landlord / property manager.
for example if you have a run down property with crappy management, but you are located on the campus of a major university with limited housing options, you will likely be always full and be collecting maximum rent.
One of our observations based on tenant profile, will indicate how long you will keep a tenant right from the start.
I would say the average time a tenant will stay in a property is 2.5 years.
If they are moving to the area with a family to take a job and establish themselves in a community, they will likely rent for about 1.5 years, before they buy a house.
If you have elderly tenants, that time frame could be longer.
If you rent a single family home to an established family, that could also be longer.
If you are targeting professors or mature students, your average tenancy maybe shorter. It could be as short as a 4 month fixed term.
If you are doing group leases to 4 or more students on an annual basis, you will likely turn the unit over once per year, unless you are lucky to find a group willing to live together for more than one year.
So, what are some other reasons tenants will leave seemingly without reason.
Let’s not forget, people are polite by nature and do not like confrontation. This means, most people will not come out and tell you they are starting to look around.
You need to think proactively,
Ask yourself these questions:
Are your properties in good condition?
Do you respond quickly to solve maintenance issues or other tenant concerns?
Are you charging the correct amount of rent?
Do you provide good value to your tenants?
Are your properties properly managed?
Do your current tenants have a history of being long term tenants at previous places they have lived?
Do your current tenants have a history of short tenancy at previous addresses?
Do you rent to young professionals, that have the ability to buy a house, instead of renting?
What is the real estate market like in your area, such as: Is it a good climate to buy instead of rent? Are housing prices high, making it difficult for people to buy? Are housing prices low and rent is comparitively high, making it better to buy instead of rent?
Is there a culture in your area, that encourages people to buy homes, instead of renting (this is the culture in Canada and the USA)? It is considered a good idea and a natural thing to do as a family.
Are there newer or renovated properties in your area charging the same amount of rent?
That ends the self reflection portion of the post, now let’s dig into some signs, some are subtle, some are not.
Your tenant asks you how much notice they need to give, to get out of their lease?
Your tenant asks if they can use you as a reference for an apartment they are looking at?
Your tenant is not getting along with your superitendent or property manager.
Your tenant is not getting along with one or more other residents in the building?
You notice that your tenant has a boyfriend / girlfriend staying with them a lot?
You notice that your tenant is not staying in their place, and it is becoming an expensive closet for them?
Your tenant asks if they can have a pet and you do not allow it, due to a no pet policy.
Your tenant asks for a rent consession due to a change in income level or job loss.
Your tenant asks for a change in the amount of tenants in the apartment, such as wanting to add a couple of roommates.
Your tenant asks for several renovations, and you do not agree to them?
Your tenant tells you in casual conversation about a sick close realative they wished they lived closer to, so they could care for them.
You notice your tenant is having trouble walking us and down stairs to get to their walk up apartment.
Your tenant buys a car, yet the apartment they are renting does not have parking.
Your tenants buy a second car, and ask for a second parking spot, that is unfortunately not available.
Your tenants complain about the cost of utilities in the unit they are renting from you.
Your tenant complains continuously about the condition of the apartment they are renting from you?
Your tenant asks for updates to the apartment they are renting, and you tell them you are unable to afford any renovations at this time.
Your tenant asks you if you have any larger / smaller units available.
Your tenant asks you if you have units available in a different area.
Your tenant tells you about a new job they accepted in another area.
Your tenants have a family status change, such as having a child and they are living in a small apartment.
Your tenant asks you what is required as a downpayment to purchase a house.
Your tenant asks you to address a noise complaint, and you decide you do not want to get confrontational with the other tenant, so you do not take action.
You are slow to repair maintenance issues, and your tenant needs to call you several times to have a problem fixed.
Those are likely not all the signs, but I feel I touched on most of them.
I want to start by saying, screening is critical. If you are afraid, that will hinder you from doing a great job. If you are cutting corners or are slack on your process or do not have a process, you are playing a dangerous game.
A game that could risk the personal safety and wellbeing of you, your family and other tenants in a property.
I have even heard some landlords and property managers tell me how they are not comfortable asking for personal information or calling references.
They are letting fear prevent them from doing their job.
I would argue that if I were to apply to rent an apartment and the screening process was really slack, I would walk away.
I would be nervous about what kind of people were in the building.
Here is a personal story that happened to me and what I had to deal with:
I was in my twenties (so it was over 20 years ago, when this happened). I had been living with roommates, and I wanted to live on my own.
I searched for the cheapest, halfway clean rental that was not in a dangerous area. I found a bachelor aparment for $400 per month, heat and hotwater included and they took cash.
It was an 11 unit building. I met the superintendant (who was approximately my age)
I filled out an application on the spot (which asked for very limited information).
One hour later I was accepted. I thought great, and moved in right away.
The first week I was there I had to make a noise complaint. The interesting part, is that it was to the superintendant. He liked to party all night and play loud music.
It turns out, it was something I had to learn to live with. I also noticed there was often police cars in the yard of the apartment building and cops talking to various tenants.
One night I went to do laundry in the shared laundry room. There was a notice on the door. It read something to the effect of stay with your clothes, because someone was stealing clothes from the washers and dryers.
I felt creeped out by this situation and put in my notice to quit. Fortunately I was on a month to month lease, so I only had to give 30 days notice.
I moved out, cleaned my apartment to a standard way higher then when I moved in, and tried to get in touch with the superintendant.
I knocked on his door and called him. He did not respond.
I located the phone number of the owner of the property. That is when I found out, the superintendant had left, and told the owner I had shorted my last months rent in the amount of the damage deposit.
I explained my side of the story and the owner (landlord) went into a rant about all the tenants, superintedants and maintenance people that have ripped her off since she owned the building.
Once she ended the rant, she agreed to pay me my damage deposit.
I thanked her, and met up a couple of days later to give her the keys and collect my money.
I wish I had known then what I know now about tenant screening. If I did, I would have never rented the apartment.
Previous to this experience, my landlord was a large company, so they did a proper screening and I questioned why they needed so much information.
I now know why.
What went wrong?
I was not into rental properties at that point in my life, but now twenty some years later, I realize, what some of her challenges may have been.
The obvious problems are as follows:
She did not invest in hiring a great property manager.
She did not invest in a process to hire a great superintendent.
The screening process barely existed.
The lease was a verbal agreement.
She did not keep tight control on all collected money.
She did not have systems in place to address issues of security in the building, which means her good tenants were moving out, and bad tenants were the only ones staying.
It would appear that owning this building was out of her comfort zone. Was it fear? Maybe, Was it laziness? Maybe, Was it she did not want to spend any money to have the building managed properly? It is possible or maybe she just did not know, what she did not know.
I am not sure what her particular reasons were. I do know that if she would have invested in a proper screening process and property management company, she could have saved a lot of personal stress and money in the long term. Click here to get educated
I have heard many stories similar to mine from both a tenant and landlord point of view.
If you need help with a tenant screening process, make sure to check out some of my posts about our 4 – pillar process.
Also, I go into detail about tenant screening in my book:
Thank you for reading,
do not be afraid, you are not alone.
Can you reject a potential tenants application based on amount of income?
This is a question I have been getting a lot lately, and there are a few current cases of potential tenants pushing back on landlords after they have been rejected for this reason.
I need to start by saying, if you recieve an application, make sure to look at it from the point of view of “under what conditions would this application be approved”.
Then step two, line it up with your application screening process.
Step three, make sure if you are going to turn down an application, you are not violating any human rights.
In Canada, some of the basic human rights that can never be violated that relate to property managment are as follows: Race, nationality, religion, family status, and sexual orientation.
Unfortunately I have heard stories of various landlords, property managers, and super intendants, blatently telling potential tenants that they do not want to give them an application, based on one of the above.
The other side of the application process, that you may cross over into violation territory is the federal privacy legislation. It is important to note, that just because a person mentions this to try and avoid providing you necessary information to properly screen them, that will not work in their favor.
The federal privacy laws are more to do with how you handle the information you are collecting. If you are being trusted with sensitive data that may include things like family status, sources of income, government ID numbers, etc., you need to handle it with care.
Ok, now that I got that out of the way, here is the deal.
What I mean by that, is each province, state, region or Country will have a set of rules that govern the issue of rejection based on an affordibility scale.
I did contact the residential tenancy board in my area (Nova Scotia, Canada) and here is what they had to say on the issue:
We have reviewed your email regarding the rental application process.
Nova Scotia’s Residential Tenancies Act determines the rights and responsibilities of landlords and tenants, but does not extend to the application process.
Either party may end negotiations before a formal rental agreement is entered into.
Considering this, a landlord may ask for whatever information they consider necessary to evaluate a potential tenant.
If the applicant is uncomfortable providing any of the requested information, they may seek accommodation elsewhere.
Regarding when a tenancy begins, Section 3 of the Residential Tenancies Act states the following:
(1) Notwithstanding any agreement, declaration, waiver or statement to the contrary, this Act applies when the relation of landlord and tenant exists between a person and an individual in respect of residential premises.
(2) For the purposes of subsection (1), the relation of landlord and tenant is deemed to exist in respect of residential premises between an individual and a person when an individual
(a) possesses or occupies residential premises and has paid or agreed to pay rent to the person;
(b) makes an agreement with the person by which the individual is granted the right to possess or occupy residential premises in consideration of the payment of or promise to pay rent;
(c) has possessed or occupied residential premises and has paid or agreed to pay rent to the person.
This condition also includes the payment of a security deposit, as per Section 6 of the Act:
(1) No person shall demand, accept or receive, from an individual who may, or applies to, become a tenant of that person, a sum of money or other value in consideration of or respecting the application by the individual to become a tenant of that person.
(2) For the purpose of a proceeding in respect of subsection (1),
(a) a person who contravenes subsection (1) is deemed to be a landlord;
(b) the individual from whom that person demands, accepts or receives a sum of money or other value is deemed to be a tenant; and
(c) a relation of landlord and tenant is deemed to exist between them.
At the federal level, the Office of the Privacy Commissioner of Canada discusses privacy standards under the Personal Information Protection and Electronic Documents Act (PIPEDA). If you wish to explore the issue from a privacy perspective, you may contact the Office of the Privacy Commissioner of Canada:
The Residential Tenancies Act and its processes can be complex. As follow-up questions are likely, we cannot thoroughly respond to Residential Tenancies questions via email. Please contact Residential Tenancies directly by calling (902) 424-5200 or 1-800-670-4357 to discuss questions in detail. We are available to assist you Mondays through Fridays, 8:30 am to 4:30 pm.
As you can see, the laws around this issue are pretty clear. Make sure to check out the laws in your area, before you start screening applications. Fair and affordable housing has been becoming a hot topic lately especially in Canada and the USA. The other problem is that more investors own properties in both Canada, the USA, plus various states and provinces. That creates a challenge, due to the fact that each state or province has its own residential tenancy guidelines.
I hope that this post clears up some of the grey around this issue.
If you want a full book with stories and practical advice, click here and buy our book. Landlord by Design – Complete (and I mean NOT sugar coated) Guide to Residential Property Management.
What should you ask to pre-qualify a tenant?
This is a very common question. When you rent apartments or homes you have to be fair.
You cannot violate any human rights as a landlord.
That being said, landlords and property managers are people and have rights also.
You also have a duty to protect the other tenants in the building.
These are the questions I have come up with, that I believe are fair, and do not violate any human rights:
You can see that the answers can quickly eliminate a tenant that will not work for the property, or qualify one that will.
One example for us, is I have a long term smoking tenant that lives in one side of a duplex. I always make sure any tenants I place in the other side are aware, and ok with the possibility that they might smell some cigarette smoke.
Until next time
Michael P Currie