July 2026 - The Money Machine - Screen Applicants

Removing an unwanted tenant is difficult. Very difficult. The Residential Tenancies Act sets out the framework of expected behaviour on the part of both tenants and landlords in the Province of Ontario. And the Landlord and Tenant Board is the bureau that enforces the Act. However, you need to keep in mind that the Residential Tenancies Act is a piece of Consumer Protection legislation. Its rules are very slanted in favour of the tenant. And the Landlord and Tenant Board functions heavily in favour of the tenant. Recently I spoke to a landlord who had taken a problem tenant before the board for continued destructive behaviour. Many of the actions he had captured on CCTV. He was seeking an eviction order. The adjudicator didn’t question the destructive behaviour. However, since the videos depicted actions that had taken place over the past month, the Board ruled that, since the offences hadn’t occurred in the last 7 days, they had to assume the behaviour had been corrected. Case dismissed. I could go on and on filling pages with similar disappointing results at the hands of the Landlord and Tenant Board. In fact, so ineffective and disappointing has the process been for landlords that it has spawned the ‘cash for keys’ phenomenon where landlords pay thousands and thousands of dollars to problem tenants to get them to vacate. Rewarding bad behaviour in essence. As a result, I have encountered a number of landlords who have become so disillusioned that they have given up on the whole belief in residential real estate investment as a means of building wealth and creating passive income. And while I can understand the sentiment, I encourage them not to react by giving up. Real estate investment is a way to build wealth, and rental real estate is a very effective vehicle to build a passive income stream for retirement. The fact of the matter is that while there are definitely bad and irresponsible tenants out there, there are also a lot of good ones. And since you won’t get a lot of help from the system, the trick is to make as few mistakes as possible when you are in the process of selecting a tenant. Nobody bats 1,000 as they say. The odd ‘bad apple’ will slip through. But there are things you can do and warning signs you can watch for when it comes to selecting a tenant. Here are just a few: 1. Amount of Rent Don’t shoot for the highest rent possible. You’ll often end up with people applying who have no other option, or people who don’t care; they don’t plan on paying it anyway. Keep your rent competitive. You’ll have a reasonable selection of applicants. Now take your time. Screen them carefully and go for the best. 2. Past Rental History To me, it’s very important to know why a tenant applicant is moving and how long they have lived in their past dwelling. If they have moved every 6 months, don’t consider them even when they tell you they want long term and this will be their ‘forever home’. They have demonstrated a lifestyle pattern. They will be moving out of you in 6 months. And turnover wastes time and costs money. 3. Past Landlord History Nothing is more important to me than the experience of current and past landlords. Does the current landlord know they are moving? Would he rent to them again? Why are they moving? And a word of caution here: problem tenants will likely have a few friends who will pose as current and past landlords. Ask detailed questions. When did they move in? How did they first connect with you? How much rent were they paying? And of course, details of their experiences with the tenant. Drive by the address and see what you think of the overall condition of the place. Check the address on GeoWarehouse and make sure it is owned by the person held out to be the landlord. And how do I handle first-time renters? Perhaps a young couple just moving out from their parents’ home or people new to the country? In each case they may prove to be the greatest tenants in the world, but without a past track record I can research, I’m most likely going to keep looking. 4. A Group of Friends These days it may be a couple living common-law, and I’m not any more or less likely to rent to them than a couple that are married, but I want to know how long they have been together. And if it’s two or three people who have gotten together to share the cost of rent, I’ll likely take a pass. It’s been my experience these bonds don’t last. One gets a girlfriend or boyfriend and moves out. The other one can’t afford it on their own. I understand, of course, that nothing is guaranteed as permanent. Hey, the majority of marriages don’t last. But it’s prudent to play the odds. 5. Non-Smokers You can have a non-smoking policy, and you can state in your ad ‘non-smokers’. It’s been my experience that that doesn’t deter smokers at all. When I meet the prospect and the signs are there that they are smokers, I ask, ‘Are you a smoker?’ I always get ‘yes, but I would never smoke in the house’. That assurance might as well be written in smoke or carved in running water. It’s -10⁰ and snowing outside. They wake up at 2 am and need a cigarette. Are they going to go out in their jammies to light up? Not a chance. And when they leave, you’ll spend thousands of dollars literally repainting, cleaning carpet, throwing out blinds, etc. I could go on and on. Believe me, with 50 years of experience as a landlord, I’ve encountered a lot of situations. And don’t get me wrong. There are a lot of great tenants out there. I’ve had tenants leave after 10-12 years as occupants and the unit looks as good as the day they moved in. And I’d say that 90% of the tenants I rent to are wonderful. The fact is, there are the other 10% that can make the whole investment process a nightmare. The odd one will slip through, but take your time. Be thorough during your screening. And don’t give up. Being a landlord is not without its problems, but you can minimize many of them right up front and realize every goal you set out for yourself when you first become a landlord.