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Now, on to the post.
It’s not easy being a renter.
Not only is the social pressure always on you to “grow up” and buy, there’s dealing with crappy landlords, surprise rent increases, and renovictions. For many people, these problems are so serious that they buy just to not have to deal with the headaches anymore.
There’s a problem with this approach.
First of all, becoming a homeowner doesn’t make the problems of renting just go away. Instead, it replaces them with a whole new set of problems, and in many cases they’re much more expensive. If your boiler breaks or your roof starts leaking, there’s no landlord to complain to. It’s now your problem. Also, you’re now indebted to the bank, owe the government property taxes, and pay way more for insurance.
And second, many of the issues you deal with as a renter can be mitigated by how you choose your rental.
Landlording is one of the most heavily regulated businesses out there, but many renters don’t realize what protections are available to them, and also don’t realize the traps that they can fall into that put them at a power disadvantage.
FIRECracker and I have been renting now for over 20 years, and in that time we’ve had awesome landlords, awful landlords, and everything in between.
And because we’ve rented for so long, we’ve developed a kind of sixth sense for how to find a good apartment, as well as getting landlords to like us. This latest move that we just made, we applied to 4 different places and got accepted by all of them.
Here’s what we learned.
Prioritize Ownership Structure
Every city has different rules, but if you live in a city with some form of rent control, meaning the landlord is limited in how much they can raise the rent each year, that’s a massive advantage in your favour. However, too many renters accidentally give up this advantage by picking the wrong units.
Sometimes rent control laws aren’t universal and apply only to certain units. For example, in Toronto, rent control only applies to units that were first rented out on or before November 15, 2018. So if prospective renters look at units that are newer built because they look nicer, they are giving up a massively powerful card in their hands.
Another mistake renters make is renting out a condo that’s owned by an individual landlord. Even if that unit is technically covered by rent control, these protections can be bypassed if the owner sells the unit. In a rising real estate market, it’s very tempting for an individual owner to cash out and evict their tenant, especially if that tenant is paying below market rates.
Owners can also choose to move into the unit themselves, which has the same effect. There are ways to sue the owner if you can prove they did this just to bypass rent control, but that doesn’t help you move back in.
For that reason, we only look at purpose-built rental buildings that are multi-unit, with either an individual or a management company that owns the entire building. These units can’t be individually sold out from under you, and the landlord generally can’t claim they need your unit for themselves when there are other units available.
Other people care about the views or the granite countertops. We ignore all that and instead care about each unit’s ownership structure. As a result, we’ve never been forced to move by an unscrupulous landlord trying to raise our rent.
Research the Management Company
Management companies for apartment buildings, like individual landlords, run the gamut from being awesome to being slumlords. Always Google the name of the management company to see if they’ve been named in any lawsuits or cited by the city.
Check out the common areas of each building and see how well maintained they are. Pay particular attention to lawns, laundry rooms, and amenity rooms. If the grass is neatly trimmed, they probably care about doing a good job.
Also, it really helps to come back to the building when the landlord’s not there and chat with some of the other tenants as they leave the building. Ask them if they enjoy living there, and if they have any issues with the landlord. If there are problems, you will hear about it.
Check the Taps
This seems kind of silly, but always turn on the taps of any units you view. Most landlords, even bad ones, will superficially fix a place up before they show it. But if the water pressure sucks, or the hot water doesn’t work, then that indicates a systemic issue in the building that isn’t being fixed.
Treat Viewings Like a Job Interview
I’ve been harping on bad landlords this entire time, so let’s change it up and talk about how to be a good tenant.
Always be respectful, courteous, and PUNCTUAL. If you say you’re going to show up at 10:00 AM, be there 5 minutes early.
Look presentable. Comb your hair, trim your nails, and dress up. Landlords only have a few minutes to form an opinion about you, and you want to make it easy for them to think of you as a polite, organized professional that will likely pay their rent on time and not build a meth lab.
Besides, you can always change back into your “I’m with stupid” t-shirt after you move in.
Have Your Paperwork Ready
I am always amazed by people going to a rental viewing and acting surprised when they’re asked to provide a pay stub. Every landlord asks for the same paperwork: good credit, a pay stub to prove you’re employed, a recent bank account statement, and a reference from your old landlord. Make sure your landlord can access that information (with account numbers redacted, of course) and that they prove you are a good tenant with good financial standing.
Protip: For FIRE people who don’t have a regular, salaried job, this part can be a bit challenging. Even if you can’t provide a paystub, you can provide your previous year’s Notice of Assessment (aka your tax return), as well as a bank statement showing plenty of cash. Americans can use IRS Form 1040 or request a Tax Return Transcript from the IRS online portal.
Pit Them Against Each Other
Hopefully, if you’ve followed these tips and you’ve applied to some units that you like, soon you’ll have your first acceptance.
This is when you can put landlords against each other.
As soon you get one acceptance, immediately inform all the other landlords at future viewing you’ve been approved and they are pushing you to make a decision quickly. Things tend to go very quickly at this point because once you’ve been accepted by one landlord, the others jump on you like hungry cats.
Now is also the time to pit landlords against each other to negotiate rent reductions or other incentives. Be professional and courteous, and use language like:
I really like (say something positive) about your building, and I would really love to be your tenant. If you lower your rent to (amount), I’d be comfortable signing with you right away.
Conclusion
Being a good renter is more than just paying your rent on time and taking care of the place. Being a good renter means being good at the process of finding good rentals, and it’s a skill just like any other that you get better at over time with practice.
However, many renters keep making the same mistakes over and over again, and mistakenly conclude that renting is just too hard so they have to buy instead. If you want to become a homeowner because you want to be a homeowner, fine. Go for it. But don’t blame the rental market for forcing you to go into debt.
Navigating the rental market is a game. There are rules, there are strategies that you can learn, and there are tips and techniques you can use to gain an advantage over your opponents, which are the landlords.
And if you invest the time to get good at this game, you can find yourself consistently living in nice places, pay below market rent, and not worry about being evicted.
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