A couple of years ago we wrote an article about the way landlords decide on a prospective tenant for their rental property. We’ve had great feedback from our landlord clients about how useful that review was and it has served as a primer for our clients who are new to being a landlord!
While the majority of our work on the rental side is with our investor/landlord clients, we do sometimes help tenants find a place to rent, often as a precursor to buying in the future. With that in mind, we thought we’d flip the script and talk about how tenants think about rentals the three questions they answer before deciding on whether they’re interested in a given property.
Let’s get into it!
Question #1 – Does it have what we need?
The most fundamental question all tenants ask is whether a potential rental property has the necessary attributes they need. While these can vary tremendously from tenant to tenant, let’s review the big considerations that go into answering this question.
First and foremost, does it have enough space? While this is often determined in the form of number of bedrooms, we’ve seen lots of tenants who make do with different layouts or fewer bedrooms than they’d like if there is enough square footage. A family with two kids might want separate bedrooms for the kids, but they might consider a rental with a large enough bedroom that could accommodate two separate areas for each child. If there just isn’t enough square footage, where the tenant can’t figure out how they could actually live in a happy fashion in the space, they just don’t proceed.
Secondly, can everyone in our family actually live there? This may sound like we’re talking about the amount of space, but we’re actually talking about any restrictions due to layout or policies. If you have someone with limited mobility, too many stairs or too small a bathroom can make an otherwise perfect rental a no-go. Similarly, if you have a beloved pet and the rental doesn’t permit pets, the search continues. While we see fewer smokers these days, a tenant who smokes may refuse to consider a property that doesn’t permit smoking or at least have a balcony or easy access to an outside area where they can smoke.
The final big consideration for this question is whether any must-haves are missing at the potential rental property. The list of what is a “must” varies from tenant to tenant, but dedicated parking is often a key requirement, as is in-home laundry. It is all a function of lifestyle and what the tenant considers crucial in a home. In some cases, they can manage with some version of it, but in other cases, it’s either there or not.
Question #2 – Can we make it work?
As we alluded to in the above section, tenants will often be willing to come to a compromise about a desired attribute in a rental. This can mean on-street parking if the rental has no dedicated parking, or shared laundry rather than exclusive laundry. We often see tenants who think creatively when it comes to finding the space they need. If two roommates both need a home office, some layouts with the same square footage as another may allow that to happen, whereas it just doesn’t work with the other option.
In a more general sense, tenants have to look at what tweaks and upgrades they can do to a unit to make it acceptable to them. Unlike when you buy a home, tenants often don’t have the ability to make substantial improvements to a home. Someone buying a condo unit may be fine with the outdated flooring and kitchen because they can replace and update both. The same unit that is for rent faces a far greater challenge, as tenants have to live with the home “as is” to a great extent. We often see tenants who want to paint to refresh or brighten up a space, change light fixtures or do other relatively quick and cheap updates to make it more to their liking. A rental unit that works in a broad sense but isn’t too appealing often has lots of applications where the prospective tenant is wanting permission to do such updates.
There is of course a financial element to this question as well. While landlords are focused on whether a tenant can afford the rental rate and how much of their income is going towards housing, tenants are often focused on if they can afford it at all. While we see many tenants that are comfortable (or willing to pay) rent that is a significant percentage of their income, it is quite rare to see a tenant consider a property they just can’t afford on a monthly basis. If we had to put it simply, landlords look to see whether tenants can afford the home if their finances took a turn for the worse, while tenants look to see if their current income (or even hoped for future increased income) is enough.
Question #3 – Does it feel right?
The final question that tenants must answer before they decide if they want to proceed with a rental application is whether the property feels like their next home? This question is mostly removed from the specific attributes of a home and more about the property, building, location, and neighbourhood.
There are often places that seem great on paper and fit the bill for a prospective rental unit, but that the tenant finds unappealing when they visit. This is particularly common when there is a disconnect between the rental unit and other aspects. For example, a renovated condo unit that looks great in photos and has all the required attributes may attract lots of showings and interest. If, however, the building, the grounds, the lobby area and the common areas are older and not in great shape, prospective tenants may decide against it.
If a tenant has previously had a negative experience with a landlord, or been evicted due to a renovation or sale of their rental, they are often very focused on the landlord’s behaviour during the application process and the future plans for the rental property. Much like many landlords look for long-term tenants who will pay the rent, keep the property in good shape and not cause problems, many tenants are looking for landlords who will uphold their side of the responsibilities and who will let them enjoy the rental and live there for a length of time.
When we work with rental properties on either the landlord or tenant side, we see the above questions (and the corresponding answers) dramatically impact the likelihood of whether a rental will quickly find a new tenant or sit on the market for a length of time. If a rental unit lacks the fundamental attributes that most tenants are looking for, if the tenants can’t find a way to make it work despite any shortfalls, and if it just doesn’t feel like a place the prospective tenant would be comfortable living in, expect it to take a while to rent it out!
We hope this was a useful review of the way tenants think about potential rentals. If you’re looking for a rental right now, remember that the landlord view is focused on whether you can afford the home, if you have a good track record and whether they feel comfortable with your overall application. It is only when a place works for a tenant and the tenant profile works for a landlord that leases are signed and tenancy take place.
If you’re looking for help on either side of the rental transaction, get in touch with us to see if we can help!
