The complete tenant's guide to

Leases In The GTA

Overview

As the affordability of Real Estate in the city drops off, the demand for rentals is on the rise, and so are the rents themselves. It has become perfectly common to see a bidding war on rental properties of all types, and the red hot demand has made the landlords particularly picky. But with the right approach, your next home is not out of reach! 

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Why are landlords so picky?

Looking for a rental property can be a frustrating process, especially if your credentials are not AAA. 

But there are very good reasons for why landlords scrutinize their candidates so meticulously. The Residential Tenancies Act is skewed quite heavily in the favour of the tenant. As such, a poor choice of tenant could result in a catastrophe to the landlord’s investment and an immense amount of unnecessary headache and work. A delinquent tenant could take months to evict, resulting in losses of rental revenue to the owner. Not to mention the potential damage to the property that some bad apples can inflict. 

A seasoned landlord knows this, they’ve felt the pain before, and will do everything that they can to prevent it from happening. And as the market presents them with plentiful choices, the tenant’s representative must do an exceptional job of presenting their client in the best possible light.

So what's considered AAA?

It’s a term that’s thrown around loosely. 
In general, a prudent landlord is looking for a tenant with a credit score of 700+ and a rent-to-gross earnings ratio of 1:3. In other words, if the rent is $2,000, your gross monthly income should be $6,000 or more.   

There are plenty of other subjective factors that affect the landlord’s decision, such as: 

  • How many family members in the tenancy?
  • The length of tenure at the current job
  • The nature of tenant’s work (is it a steady pay check or a self employed income subject to fluctuations?) 
  • The age of candidate
  • Does the candidate have savings? 
  • Smoker?
  • Pets? (we’ll get to this later)
  • Good references? 
  • New to the country? 
  • And so on…

In a nutshell, the landlords two main concerns are: 

  • Will I be able to collect the rent?
  • Can I prevent my property from getting destroyed?

How to apply and succeed

Rentals are flying off the shelves – often the property will get leased by somebody else within 24 hours after your showing. Therefore, it is highly advisable to prepare the following documents before going out to see your first property so you are ready to pull the trigger:

  • A copy of Government issued ID
  • Your current letter of employment (with an income figure)
  • If self employed – A copy of your T4 or any other means of proving your income 
  • Pay stubs if available 
  • A copy of your FULL Equifax Credit Report (follow the link)
  • A filled out rental application (download a copy below) 
The more organized and complete your application is, the higher your chances are of landing the unit you want. Always include as many supporting documents as possible. You need to show that you are a responsible individual with a sufficient income to afford the rental.

Maybe sweeten the deal?

If your credentials fall short on some criteria, or if there is a high demand for a unit and you are determined to get it, there are some ways that you could sweeten the deal and possibly compensate for your application’s shortfalls. Your options are: 

  • Offer more money
  • Offer several months up front (the more you can offer, the better. If you have some savings, it is wise to use them to strengthen your offer – you will have to pay your rent eventually either way)
  • Find a high quality person to act as a Guarantor (although using a guarantor will throw off a lot of landlords as it carries a negative connotation) 
  • Look for units that aren’t highly sought after (you may have to resort to undesirable or overpriced properties if you are having a hard time with your current credentials. Get in, and make it your goal to improve your situation within the year!)
  •  Try looking for private listings online who may be sympathetic to your situation. Make them a stronger offer. These landlords are often money centric or inexperienced and may overlook your application in order to collect more rent.

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