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Disclaimer
The information contained in Smart Guide to Real Estate - Tenant Screening Made Easy is meant to serve as a
comprehensive collection of time-tested and proven strategies that the authors of this guide have applied to
substantially increase their monthly passive income revenue. Summaries, strategies, tips and tricks are only
recommendations by the authors, and reading this guide does not guarantee that one’s results will exactly
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 Table of Contents
Introduction 3

5 Critical Mistakes Most Beginning Investors Make 4

I Got The Keys, Keys, Keys 8

Ding-A-Ling-A-Ling 10

Handling The Calls 14

The Day Is Here 16

Here They Come 19

The Day After 21

Mo’ Money and Signed Agreements 26

Moving On Up 30

Some Tax Tips 31

Top 10 Things To Do For Rentals 32

About the Author 34

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 Introduction

One of the BIGGEST fears most people have about real estate investing are tenants.

How do I know this? It was my biggest fear and everyone I asked at work (in my previous life) had the same
fear as well. After asking several of my co -workers whether I should get into real estate investing, the majority
came back with HELL NO! The overwhelming response was, “You will lose everything and tenants will destroy
your investment property.” Why look any further, majority rules right?

Back in 2009 I decided to start attend networking events, seminars, and workshops geared towards real estate
investing and I discovered the exact opposite. How could this be?

Knowing who I am, I had no option but to dive in and test this out for myself. Several years later here I am
writing a step-by-step guide on how to properly screen tenants from beginning to end. Some of the strategies
you will learn in this guide is unique but has been proven to work time and time again for me and many of the
investors I’ve worked with over the years.

This guide offers a step-by-step process that we have used to fill many of our properties. By following these
steps, you too can fill your home for top dollars and attract great tenants.

Gary Hibbert

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5 Critical Mistakes Most Beginning Real Estate Investors Make
Before we get into the scariest part of real estate investing lets discuss first discuss the mistakes people make
getting into Real Estate investing.

Anyone looking to change their lives or start a business can learn from the mistakes I’ve made and mistakes
I’ve seen other make as well. Prior to Real Estate investing I was heavily involved in the stock markets, foreign
exchange, futures and even bonds from time to time. Since my switch to Real Estate investing, my whole
world has completely changed.

Some may say I’m lucky, or I happened to time the market right.

I disagree, luck comes with HARD work and you can’t TIME the market. It’s more advantageous to spend
time IN the market.

I’ve always made it very clear throughout my journey in Real Estate investing, I’ve made tons of mistakes. As
tough as it is to admit, I still make some questionable decisions but I always learn from them and it’s rare I lose
money (sleep however is another story).

When you’ve been in the game for as long as I have, you forget to go back and teach the basics. The core
fundamentals required to succeed in Real Estate investing and life.

Today I’m going to share the top 5 reasons why many people fail at Real Estate investing and call it quits
forever. What I’m about to share isn’t rocket science but it’s incredibly important you abide by these rules and
use them as a guideline.

If not, be prepared to suffer the consequences.

THE TOP 5 REASONS WHY MANY PEOPLE FAIL

AT REAL ESTATE INVESTING

1. Wrong Mindset
Over the years, this is the one thing I’ve consistently talked about. Having the wrong mindset can make or
break you in the world of Real Estate investing. So many people think brains and talent bring success or
wealth, but it’s simply not true. It helps, but it goes much deeper.

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Having the right mindset is powerful beyond measures. It’s the foundation to true happiness and the building
blocks to success. Prior to 2008, my mindset was narrow and small. Today, I truly believe I have the ability to
manifest whatever I want in my life. I’ve proven this to myself over the last 8 years.
Here’s the secret: change your car or ride to work into your library and change your T.V. into an education
course. Some of my earlier teachers were Jim Rohn, Zig Ziglar, Napolean Hill and Brian Tracy. Prior to this, I
was so distracted and felt I had no control of my life.

Since I’ve taken heed to their teachings my productivity and lifestyle has completely changed however, there
is a cost and it’s important to have down time and rewards along your journey.

2. Analysis Paralysis

This is by far the BIGGEST issue I see many beginning investors face. It’s also called the fear of the unknown.
I’ve sat and watched many investors come out month after month, year after year and never take action.
Why?

I believe it’s because they feel they need to come out to one more seminar just in case there’s something they
may have missed or haven’t heard that will ensure their success.

Here’s the hard truth.

No one goes through the woods without a cut, bruise, scrape or bite and makes it out through the other side
without a story to tell.
There comes a time when you have to take a leap of faith and here’s the best way I know how to do it:

Determine clearly what goals you desire to achieve (attract) by writing it down. Keeping it stored in your head
doesn’t work. Putting pen to paper starts the attraction process.
Now here’s the secret formula most miss: Understanding that purpose is stronger than object. Read it again,
and let it sink in.

For every home I’ve acquired, I’ve tied a purpose to it. The first home I bought was for my son’s education.
The 2nd home was for my daughter’s education. See, when a strong purpose is tied to an object it’s
impossible to stop you. If you truly believe in your purpose for acquiring what you want- it will happen.

Every moment is a moment of decision. Plan your day before you start your day. Your life will change and
analysis paralysis will be a thing of the past.

3. Know Your Number

So many people get into Real Estate investing thinking they are going to become overnight Millionaires.
Coming in with that mindset is called speculation and can lead to disaster.

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When the market is strong, everyone wants to become an overnight success. Here’s the problem, the market
will turn and people will get caught holding the hot potato. So how do you protect yourself from this?

You have to know your numbers. One of the first things I was taught when I first got into Real Estate investing
is “Cash Flow is KING!” To this day, every property I own is cash flow positive. This protects me from interest
rate hikes which will also eventually come one day.

Before I even think about putting in an offer, I will run the numbers including property management fees,
maintenance, vacancy and an interest rate higher than what the banks are offering to ensure the numbers
work.

Understanding the numbers is such an important ingredient to your success. This is why we dedicate our
beginning in-class workshop (Fast Start Training) on understanding the numbers.

4. Understanding Leveraging

Once I understood the magic of leveraging, it changed my life forever. Real estate is one of the few investment
vehicles you can buy for a small fraction of the price. What could be better than to own and control an asset
that will over time, appreciate, have mortgage pay down and generate cash flow?

Here are a couple ways to use leveraging in Real Estate;

If you own a home, using the equity to invest. This is one of the best ways to create wealth. Don’t get stuck in
the mentality of having to pay your mortgage down and nothing else. Yes I believe in mortgage pay down but
if you can borrow the equity at 3-4% and create returns of 20-30% in Real Estate, it’s called a game changer.

The other type of leveraging I see many investors use time and time again is using other people’s money
(OPM). There will come a time when you run out of money, it happens to all investors. The only way to
continue is to trade your experience for their money through Joint Ventures.

70% of the properties I own today are Joint Ventures. If I didn’t master the art of Joint Venture Partnership I
would probably still be at my 9-5 job.

Keep this in mind, if you use leveraging to your advantage it will make you wealthy however, if you over-
leverage it could sink your ship. Always seek expert advice.

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5. Having a Team

Real Estate investing is a team sport. Expand your association and get around people who have good ideas to
share. Smart Home Choice, like other Real Estate Networking Groups offers one of the best ways –
Mastermind Events.

Where can you find them? They are happening in your very own city on a weekly or monthly basis. You just
have to search for them and attend.

The next important aspect to ensuring your success is having a good team around you. When I first started, I
didn’t have a team and I failed miserably.

Once I started to build my team, things completely changed for me. Now I surround myself with the best
accountants, lawyers, mortgage agents, insurance agents, appraisers and contractors in the area. My team is
what allowed me to expand my business to a level I never thought possible.

Focus your time with people who share ideas and testimonials of not only their success but also their failures.
Those who will guide you down the right path and inspire you to be better than the person you were
yesterday.

Well, there you have it! Those are the 5 BIGGEST mistakes I see beginning investors make. These are the same
5 mistakes I made or didn’t understand in the beginning as well. If you can understand these mistakes to avoid
and study each of these teachings your life can change forever.

Success isn’t only measured in wealth, it’s also measured in happiness. Find happiness first through mindset,
then seek out wealth.

If you do it backwards all wealth does is make you more of what you already are.

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 I Got The Keys, Keys, Keys

This guide has been written for the investor that has decided to take things into their own hands. You’ve made
the decision that you don’t want a property manager and you want to learn the ins and outs of dealing with
issues that will arise with your property and the wonderful world of tenanting all by yourself.

Now that you have found your investment property the next step, once you take possession of the property, is
to visit your home and get it prepared for an Open House.

That’s right, an Open House. You see, we do things a bit different from the average investor.

Top 5 Things to Do When You Get Your Home

1. Clean the property thoroughly. Hopefully the previous homeowners left the property in good
condition and all you need to do is a quick sweep, mop and vacuum. When I first started I did this all on
my own (with the help of Darlene of course). If this is just too much for you, there’s nothing wrong
with hiring a cleaning company.

2. Make sure all of your appliances are in good working order after the previous owners/tenants have
vacated. Now to be proactive, you should have your real estate agent write in a clause that allows you
to do a final walk-through of the property prior to closing to do your final walk-through inspection.

3. Check to make sure the furnace is working and if it’s not during the winter months, turn on the A/C (if
you have one) to make sure it is also in good working order. Again, be proactive and validate this prior
to closing.

4. Make any required repairs that can be seen to the naked eye, such as nail holes in the wall, leaking
faucets, blown out light bulbs, etc. If some of these repairs are too much for you to handle, contact a
local handyman in the area.

5. Get a lockbox. I can’t tell you how many times I’ve jumped in my car, drove to the property, go to open
the door and…. NO KEYS! A lockbox will save you time and aggravation. Not only for your open house
but for contractors, your cleaning crew etc.

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 WHOEVER HOLDS THE KEYS HOLDS THE
POWER.

Remember this very important phrase. Whoever holds the keys holds the power. Make sure you screen your
tenants properly, ask for whatever you need to make the right determination if they will be the right fit for
your property.

Once the keys are handed over to your new tenant and you’ve selected the wrong family, it could be a
nightmare. The landlord and Tenant Board are heavily biased towards tenants so select your tenants wisely as
getting them out can be very difficult.

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 Ding-A-Ling-A-Ling
This is one of the most important things I have learned when advertising my investment properties.

Put yourself in the person’s shoes who is reading your advertisement. You want to catch their attention with
the description of your home. What is going to make your ad stand out from your competitors’
advertisements?

MAKE THE PHONE RING!

There are a number of different ways to do this:

1. Write “Pet Friendly” – What! Yes I said it. By writing pet friendly the tenants will be upfront in letting
me know they have a pet. If they tell you they have a pet you can then make the decision if you want
them or not. If you write “non-pet friendly” in your ad, it’s not difficult for them to lie and bring their
pets in after the fact. At that point there’s nothing you can do. Another great way to find out if they
have pets is to have a look on their Facebook or Instagram posts. If their profile picture is a dog, it’s
safe to say they’re a pet lover. Once they’ve informed you of their pet it is now your decision to go with
them or not. If you decide against their application and they ask, simply tell them you decided to go
with another candidate or you are still looking.

2. All Credit Scores Welcomed – Another strange one! By including this in my ads, I’m letting people
know I’m willing to work with them. I’ve selected many tenants that don’t have the best credit score
and many of them have become some of my best tenants. The key is to understand how to read the
credit score and why their credit is where it is. Did they just go through a divorce or do they never pay
anyone back on time? BIG difference. If you don’t know how to read the report… learn. It’s very
important. If you decide not to learn how to read a report (I’m not that great myself) find a mortgage
agent who can assist you with your decision making or someone who can.

3. Hit Them Emotionally – When you create your ad, you want to appeal to their emotions and not tell
them about the features of the property.

What Not to Say – This home comes with a finished basement.

It works but it doesn’t have that WOW factor.

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 What to Say – “This professionally designed kitchen comes with stainless steel appliances, newly
modernized backsplash and the cabinetry will make your in-laws absolutely jealous.” Don’t forget, you
want to stand out from your competition.

4. Get More Information for Free – The best way to get people to call you is to get a 1-800 number
where they can get additional information on your home. It also allows you to have control of your
time and can call your prospects back on your time. This was especially important when I first started
and there were higher vacancy rates in the areas we were investing in. In today’s market, vacancy rates
in many areas around the GTA are under 2% and in some places 0%.

You have less than a second to grab their attention. You want them to call you and not your competitors.
Here’s an example of an ad that we have used successfully in the past.

Beautiful 3 Bedroom Home Move In Ready – Pet Friendly All Credit Scores Welcomed

Check out this stunning 3 bedroom, 2 bathroom home located in a highly sought
after neighbourhood. Close to all amenities including Wal-Mart, Tim Horton's,
Superstore, restaurants and easy driving distance to both the 401 and 407. much
more.

As soon as you walk in you'll feel at home with a very spacious open concept on
the main floor. The large master bedroom comes with a walk-in closet and a
very convenient 4 piece ensuite bathroom.

This professionally designed kitchen comes with stainless steel

appliances, newly modernized backsplash and the cabinetry will make
your in-laws absolutely jealous. Don’t forget, you want to stand out from
your competition. The back yard is perfect for you, your family and friends to
enjoy.

Please call our free 24 hour message 7 days a week at 1-800-123-4567 for
additional information or to schedule a walkthrough.

For a video walkthrough of this beautiful home please visit

Video - http://youtube/xxxXXXxxxXX

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Should you use a video walkthrough? It’s up to you and I’ll give you the pro’s and con’s.

The Good in the sense that the people coming out to your home have had a chance to view your home and
have a better idea of what it looks like, so will therefore be more interested.

The Bad in the sense that you may not get as much traffic flowing to your property as you had hoped. You will
however, get solid leads out to your properties that are very serious about moving into your home.

This is something I’ll leave up to you to experiment with to see if it works for you.

Now, when you’re making your videos, they don’t have to be professional. Just be yourself; people want to
know who you are. Please feel free to view some of our videos at:

Where to Advertise
Online

There are a number of free advertising sites on the Internet that you can use to get your phone to ring. The
most popular free sites at the time of writing this is Kijiji and this is usually all you need in today’s market.

Your local area websites may not generate as many leads but in a market where vacancy rates are higher I
highly recommend you get your ad onto as many sites as possible. Even if you only get 1 lead a week on a site
that receives minimal traffic, it is better than none. You never know, that may be the person who will be
perfect for your investment property

Remember the websites below are being quoted at the time of the writing of this guide and are focused on
reaching others within the province of Ontario.

www.kijiji.ca – Free (good traffic)

facebook.com

Instagram

www.rentboard.ca – Paid advertising

www.viewit.ca – Paid advertising

www.gottarent.com – Paid advertising

These are just a few sites that I’ve found that have provided us with great success. I’m sure there are many
more out there, so take the time to do your own search to find other sites on which to advertise your
property.
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When you advertise your home, make sure to place the ad in the House Rental section and not the For Sale
section.

Another thing I found to be very interesting were the times I placed or bumped my ads my ads. In the
morning at 8:00 am, at lunch around 12:00pm and on the way home around 4:30pm.

It may be different in your area, either way pay attention to your call volumes and determine the times
throughout the week when you consistently experience higher than normal call volumes. This will be the time
you want to bump up your ads to the front page.

Offline

This is a major area that so many people forget to take advantage of. This may be more important than
advertising online.

So what are some good offline ideas to use. A lawn sign with “For Lease” works well or placing ads in the local
grocery stores, laudrymats and/or convenience stores.

They are most likely familiar with the area, have family in the area and their kids go to school in the vicinity.
Don’t forget this stream of advertising.

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 Handling The Calls
Now for the fun part… You get to talk to your first client!

KEEP IT SIMPLE!

Don’t try to sell your home over the phone. Just get their name, number, people moving in and their
household income. Once I’ve gathered this information Here’s what I say next;

“I’ll be at the property this Wednesday at 7:00 pm. It's located at xxxxxxx drive. Does this work for you?”

I do my showings on Wednesdays at 7pm and Sundays at 2pm. I’ve found these 2 days at these times work the
best.

How to Book Your Appointments

When you are booking appointments for people to view your home, I will book 3 to 4 for every 15 minute
interval up to an hour. For example

7:00 – 3 appointments
7:15pm – 4 appointments
7:30pm 3 – appointments
7:45 – 4 appointments

I won’t book anyone at 8pm. If you do, you’ll be there until 9pm.

Before I used to book everyone right at 7pm. What I discovered is that people got very frustrated because
they were waiting too long or there were too many people. By having a few come in at a time, it shows there’s
serious interest in my property and I found people were not losing their tempers.

Avoid telling them it’s an Open House but rather it’s as an appointment. If you tell them it’s an Open House,
most times they will think it’s optional and may not show up at all.

Before you hang up, make sure you ask this important question. “If you are unable to make your
appointment, can you please contact me to cancel?”

Let them reply. Don’t make it a statement, it’s important to phrase it as a question. By doing this, it
drastically decreases the amount of no shows.

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Another important thing to do is to track each call that comes in. By tracking the calls, you can write down
some information on each person coming to your home on the day of the viewing.

Showings on Wednesdays and Sundays

I like to take it one step further and do follow-up calls the day of to ensure they are still coming. It’s not
necessary to do this since you’ve already asked them to call you should they have to cancel. However, it’s just
a final fail proof step that I prefer to take.

Calendar Entry in Cell Phone

For every appointment I like to add a calendar entry into my phone with their names and telephone number.
The good thing about doing it this way is that no matter where I am I can give them a call to remind them with
just a few clicks on my phone.

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 The Day Is Here
Before you head out to your property, the most important thing is to make sure you have all your
documentation ready to go. The last thing you want is NOT to have any applications forms at the property.

So here are all the things you need to make sure you have before you get out to the property.

Sign-in Sheet

For the sign-in sheet, I will usually have a column for their first and last name, phone # and how they found my
ad. How they found my ad is incredibly important information to me. It helps me to determine what ads are
working and should I be putting more or less money into a campaign.

The sign-in sheet is important as it allows you to know who showed up, but more importantly who didn’t show
up when they said they were going to. If they missed their first appointment with you after that very
important question you asked;

“If you are unable to make your appointment, can you please call me to cancel?”

Now ask yourself this question. How will they treat paying your rent on time?

Fast Approval Application Form

The next thing that you want to make sure that you have is probably one of the most important things - the
application form. Imagine having someone interested in your property and they are ready to move forward
and you don’t have an application form.

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 FAST Approval Form
Anyone over the age of 18 must complete a separate approval form

-SAMPLE ONLY-
Full Name ___________________________________________

E-Mail Address_______________________________________

Home Phone (_____)___________ Cell Phone (___)_______________

Social Insurance Number _________-________-__________

Date of Birth ________________________

Present Address _________________________________________________City________________

Province ____________ Postal Code _________

SMART HOME CHOICE

How long at current address? ________

Current Rent/Payment $ ________

Landlord/mgr's name __________________________________Phone (_____)______________

Employer _________________________Position ______________________ How Long? ________

MEMBERS
Address ________________________City _____________ Phone (_____)____________

Name and relationship of everyone living with you

_______________________________________________________________________________________________

GET ALL LEGAL FORMS

Any pets? Describe ______________________

Yearly income before deductions (include all income sources) $____________________

When would you like to move in? __________________________

WITH MEMBERSHIP
Is your credit, good, fair, or ugly? __________________________
I declare that the application is complete, true and correct and I herewith give my permission for anyone contacted (including TransUnion or
Equifax) to release the credit or personal information of the undersigned applicant to Management or their authorized agents, at any time, for the
purposes of entering into and continuing to offer or collect on any agreement and/or credit extended. I further authorize Management or their
Authorized Agents to verify the application information including but not limited to obtaining criminal records, contacting creditors, present or
former landlords, employers and personal references, whether listed or not, at the time of the application and at any time in the future, with
regard to any agreement entered into with Management. Any false information will constitute grounds for rejection of this application, or
Management may at any time immediately terminate any agreement entered into in reliance upon misinformation given on the application. By
providing the home phone numbers and e-mail addresses above, I/we hereby authorize the Vendor to contact me/us at my/our home phone
numbers or e-mail addresses.

Applicant’s Name (Print) __________________________________________________________

Signature & Date_________________________________________________________________

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NEVER take your property off the market and NEVER stop showing your home until you have a signed the
lease and a minimum of first month’s rent in the form of a bank money order, email money transfer or cash.

I’ve seen it happen to investors time and time again. They will stop advertising, 3 to 4 weeks go by, and the
tenant decides to back out.

Guess what? You now have to advertise your home all over again. How do I know this? I’ve made the same
mistake.

Required Information

The next thing that I like to have at the property is a document outlining all the required information that is
needed to verify their income.

Offering them this hand-out sheet after they have filled in an application provides clarity about everything else
required.

Checklist

Next Steps: Please send in the required information to info@xxxxxxxxxxxxxx.ca

Please allow 2 to 3 business days to complete once all the required information below has been
received. Once you are approved, one of our associates will be in contact with you to walk you through
the next steps into home ownership.

 Last year’s tax assessment or T4

 2 Recent pay stubs
 Other sources of income
 VALID Driver's license or government issued photo ID
 Reference Letter

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 Here They Come

This is the moment you’ve been waiting for. This is the time to be yourself and have fun with what you’ve
done up this point. The best tip I can give you is to be yourself and to be truthful.

Arrive at your property at least 20 minutes before your first appointment to ensure all the lights are turned on
to help brighten up the home. If you are doing a day showing, make sure all the blinds are opened to let in as
much sunlight as possible. If it’s cold outside, crank up the heat and if it is hot outside turn on the A/C to cool
the place down. Put some air fresheners in the house to keep the property smelling clean. Also, if you have a
gas fireplace, light it.

DING DONG!

When they come to the door, introduce yourself and have them sign in. As mentioned earlier, this is
incredibly important for tracking who came to the property and who didn’t. Make sure that you get their
e-mail address and phone numbers. You also want to make sure that their writing is legible so that if you need
to follow up with them, you can.

Once they have signed-in, have them walk through the property on their own and let them know that once
they’ve completed their tour that you will be available to answer any questions they may have.

If you have a busy Open House, these are the two different things that will happen:

1. They don’t like the house and will leave. I have no issues with this as no one is wasting anyone’s time.
They simply do not like your home. This doesn’t mean you’re home is no good; it simply doesn’t work
for them and their family.
2. They love the home and require additional information. If they love it, they will wait around to discuss
the details of the home even if you are busy with another client.

If they like the home and come back to you have them fill out the application and give them a copy of the
checklist so they know what is required to be sent in for approval.

What to Look for on a Rental Application:

 Current and previous employers – How long has the tenant been at their current job? Has he or she
switched jobs multiple times in the last few years?
 Current income level – Does the tenant’s income cover the rent plus normal living expenses?
 Contact information for previous landlords should be listed with previous addresses, amounts of rent
paid, and reasons for leaving.

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  Lifestyle information such as number and size of pets and number of occupants should be included on
the application.
 Personal references should include names, length of acquaintance, and phone numbers.

Before they leave, make sure their application is also legible and inform them you will be making a decision
soon. I always like to ask; “How quickly can you get your information to me?”

I always look at the previous landlord’s contact information and dismiss this. I don’t want the previous
landlord’s information because they may be trying to get rid of their current tenant. I need the landlord
BEFORE the current landlord. That’s the information I will ask for, as they will tell the truth.

It’s always nice to see when tenants bring all of their required information with them. It shows they are
prepared and ready to be a serious applicant. However don’t be hasty and always due your due diligence for
every applicant.

Look to see if they’ve excluded any information, this can sometimes be a RED flag that they are trying to hide
something from you.

Check to make sure they have put down their social insurance number and have signed and dated the
application. Without this, you won’t be able to pull their credit

In order to run a credit check on a tenant, the application form should, at a minimum include:

 The Tenant's Full Name

 Addresses for the Last Two Years
 Social Security Number
 Date of Birth
 Current Employer
 Current Landlord

Last but not least before they leave I always like to know how soon they can get their first and last month’s
rent together. The response you are looking for is “quickly”. If they can’t come up with first and last and it’s a
struggle, they will most likely struggle with the future rent payments as well.

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 The Day After

Call back all of your potential tenants to find out their thoughts on the home and when will they have the
required information.

It is important to act quickly while the home is still fresh in their minds and their emotions are high. Once you
have located a few suitable tenants for your home, there are number of important steps to follow.

Gathering All Their Information

Anytime we are selecting a candidate for our home, we always want to see the following:

 Last year’s tax assessment

 2 Recent pay stubs
 Other sources of income
 Driver's license

Tax Assessment or T4

The Tax Assessment also referred to as the Notice of Assessment, shows that they are paying their taxes on
time and if they have any arrears or unpaid amounts from previous years. Now, if they are self-employed it
may not be the best source to show what their true income is but it is a start. A T4 will show what they earned
at that place of employment for the year.

Pay Stub

A recent pay stub is proof that they are gainfully employed and that they have regular income. If they are self-
employed, we will ask to see their invoices for the last 3-6 months. This helps to determine what they can
afford on a monthly basis.

Other Sources of Income

By asking for this, it’s great to know if they have any other sources of income coming in such as baby bonuses,
child support, GST cheques, etc.

This helps with the calculations and you will know whether or not they can afford your property.

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Driver’s License

It’s always a good idea to verify with a driver’s license. This is for identification purposes to ensure they are
who they say they are. Or at minimum you have a legible picture of what they look like.

*Bonus *Bank Statements

I usually don’t ask for bank statements but if I’m still a bit nervous after they’ve provided me with all their
information I’ll request for at least one month’s.

This ensures they are earning what they say they are earning from their current job and they are paying their
current rent or mortgage on time. This is also important information because it allows us to see what their
current rent/mortgage is as well as other expenses and obligations they have on a monthly basis.

For example, if they are currently paying $700 in rent, and they are looking to move up to $1,800 a month in
rent, you want to make sure they have the ability to afford the higher rent.

Questions to Ask a Former Landlord (the one before the last)

If you decide to contact the previous landlord here are a few questions you can ask;

 Does the tenant owe you any outstanding rent or money?

 Does the tenant have a history of late payments?
 Has the tenant caused any damage in the rental unit?
 Did the tenant disrupt the neighbors or cause any major issues while living there?
 Did the tenant quality to receive his or her security deposit when moving out?
 Did the tenant lie on their application?
 Would you rent an apartment to this tenant in the future?

Many people will call their current landlords. You can do that, but I usually do not.

Here’s why, if they are tenants from hell and their landlord wants them out, why would the landlord tell you
the truth? If the landlord desperately wants them out of their home, they will say whatever is needed to dump
this unwanted baggage on you.

Formula

To determine if the tenant can afford your property, this is the formula I use for all of my tenants and have
had great success.

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Say for example your prospective tenants are making a combined income of $65,000 a year. It is
recommended that their rent is less than one third of their gross monthly salary.

Here is the formula to use:

$65,000 / 12 / 3 = $1,805
Based on this calculation, you would not want them paying any more than $1,800 a month on rent, not
including utilities.

12 = months
3 = 1/3 of their income

While they were at the property, you may not have had an opportunity to ask them all the required
information you needed to make your final decision as you may have had a busy open house.

Here are a few important questions to make sure you ask:

 How many people will be moving in with you?

 Do you have any pets?
 How many vehicles?
 Current rent payment?
 Why are you moving?
 How soon are you looking to move in?
 Have you had any bankruptcy or consumer proposals?
 How long have you been at your current job?

If all of their information, documentation and answers to their questions are satisfactory I will then proceed
with the credit check.

In the beginning one of the first companies we used was a tenant screening company. You can order a credit
check on any individual located within Canada or the United States with most credit check companies.

One of the most frequently asked questions we get is, ``Should I allow pets?``

This is entirely up to you.

We have in the past and have had no major issues with pets. What I do insist on meeting the pet first. I want
to see the pet and how they interact with strangers. How I’m able to see their pet is I’ll call and say I’m in the
neighborhood and need to stop in to grab one additional piece of documentation from their current place of
residence.

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I like to do this within a 15 minute timeframe so that they don’t have much time to clean up and I can truly see
how they live. I’m not concerned if the house is messy, I’m looking to see it they are hoarders etc.

If I’m satisfied with this meeting I will request a date as soon as possible to sign the lease agreement and to
get first month’s rent. Some tenants will provide first and last but I’m fine with either.

The Next Meeting

Now there are a few different options you have for arranging to collect the additional funds and signing the
lease and option to purchase agreement:

 Meet at the property they will be moving into

 Meet at their current place of residence
 Meet at a coffee shop

By visiting where they currently live, you will have an opportunity to see HOW they live.

Do not be hasty in your decision making. When you do that you may make the wrong decision and it can end
up costing you thousands of dollars.

Before you meet with the tenant that is going to be moving into your property, it is important that you
familiarize yourself with the lease agreement.

New for April 30th ,2018 all Landlords must now use the Ontario Standard Lease. Search “Ontario Residential
Tenancy” or “Ontario Lease” should bring up the most current one.

The lease does allow you to add your own clauses so I’ve attached a quick sample of the lease we use and will
be adding some of these clauses in the new standard lease agreement. (Located on our Members site).

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 LEASE AGREEMENT
(Page 1 of 8)

-SAMPLE ONLY-
THIS AGREEMENT, dated _______________, 20__ is by and between_______________________, “Owners/Managers,"
and __________________"Tenants," for rental of the dwelling located at 123 Oak Street, Toronto, ON under the
following terms and conditions:

FIXED-TERM AGREEMENT (LEASE) - Tenants agree to lease this dwelling for a fixed term of _____years, commencing on
the ____ day of ________________,20__, and ending on the ____ day of _____________, 20__. Upon expiration, this
Agreement shall become a month-to-month agreement AUTOMATICALLY, UNLESS either Tenants or Owners notify the
other party in writing at least thirty (30) days prior to expiration that they do not wish this Agreement to continue on
any basis. If the dwelling is not available for occupancy on the commencement date, Owner will not be responsible for
any damages incurred by Tenants.

SMART HOME CHOICE

RENT – The rent shall be $_______ Dollars per month during the term of this lease, each for the first twelve (12) months
and $_____ Dollars per month for months thirteen (13) through thirty–six (36). The Landlord acknowledges receipt from
the Tenant of the sum of $______Dollars as prepayment of the last month's rent.

In the event that Tenant remains in the home beyond thirty-six (36) months, the rent shall increase by 2.1% per annum.

MEMBERS
This rent increase will be due and payable at the lease anniversary date each year.

FORM OF PAYMENT - Tenants agree to pay rent in the form of a personal cheque, cashier's cheque, or a money order
made out to Owners.

PAYMENT WILL BE MADE VIA POSTDATED CHEQUES or in such a way as Owners advise the Tenants in writing.

GET ALL LEGAL FORMS

RETURNED CHEQUES - If, for any reason, a cheque used by Tenants to pay Owners is returned without having been paid,
Tenants will pay a returned cheque charge of forty-five dollars ($45) AND be responsible for any other damages incurred
by Owner in connection therewith. After the second time that a Tenants' cheque is returned, Tenants must thereafter
secure a cashier's cheque or money order for payment of rent.

WITH MEMBERSHIP
RENT DUE DATE; RENT LATE DATE - The due date for the rent owing under this Agreement, including, without
limitation, late payment penalty, is the FIRST (1ST) day of every calendar month. The very next day is the rent late date.
This is the first day when Owners will consider the rent late. Owners expect to have RECEIVED the rent before this date.
If Tenants' rent is due on the first, it must be paid on or before the third (3rd) to be "on time."

Tenant Owners/Managers

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 Mo Money and Signed Agreements
Before you sit down to meet with your future tenants make sure that you are familiar with each clause in the
agreement. You do not need to have it memorized. What we usually do is go over each of the important
clauses on each page with them and have them read over the rest on their own if they need to.

Call to confirm the time that you will be meeting and that they will have a certified cheque. DO NOT HAND
OVER THE KEYS WITHOUT THE FUNDS CLEARING. This is where I see many investors make their BIG mistake.
They get a cheque, give the tenant the keys to the house and the cheque bounces. You’ve just been had by a
professional tenant.

There are a few different ways of doing this however this is what we normally require at each of our meetings
prior to them receiving the keys. At each meeting there should be a fair exchange.

Meeting #1

Owner: Sign lease (2 copies) and give a copy to your tenant and keep one for your records. With today’s
technology Docu-sign is a great way to do this as well.

When the meeting begins have them look over the agreement and explain all of the major clauses in the
agreement. As I mentioned earlier, you do not need to go through it word for word but it is important that
you highlight the major points.

Let them know that you prefer open communication, especially if they are going to be late with their rent
payment. Remember, this is a business relationship, not a friendship.

One of my mentors Chris Seepe told me this great saying. “Be fair, friendly but firm with your tenants.” If
they are late with their payment, it is important that you start the eviction process once the rent is considered
late.

It is important to do this as it sets the tone. They know exactly what is expected from them, it keeps you
number one on their priority list and you can now start to document their habits.

If you collect enough N4’s (late payment of rent) you can file for an eviction so make sure this is done timely
and correctly. At the conclusion of this meeting, make sure that you inform them to contact hydro and gas
into their names. Give them a copy of the signed lease and they can give you first month’s rent and make sure
it’s certified.

In many municipalities in the Durham Region the water bill has to stay in the landlord’s name. If this is the
case, ask the water company for a “care of” form. This is an example of what it looks like below.

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This allows the tenants to open the water bill when it comes to your investment property and pay it on your
behalf. If the tenants are in the property and they don’t pay it this will not impact your credit however if they
leave and don’t pay you will be on the hook for it. Only once they vacate your credit could be at jeopardy.

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Meeting #2
Tenant:
Provides you with last month’s rent and postdated cheques to the end of the calendar year (i.e. December).

For instance, your tenant moves into the property in August. You ask them for first and last month, plus
postdated cheques to December.

Why? This makes your year-end process much easier when it comes to collecting additional postdated
cheques for the upcoming year. If you have multiple properties, it especially helps to streamline processes,
banking and bookkeeping.

For all postdated cheques, ensure you have taken copies.

Visit your bank where your new account is set up and ask them to deposit your postdated cheques on the first
of the month. Expect the bank to charge minimal service fees.

For many of my properties today, I use email money transfer. It’s quick and easy and I have my tenants use
the street name as the password.

Owner:
Ensure utilities have been transferred into the tenants’ name.

Handing over keys to the property. Remember, make sure the funds are certified.

Depending on the city where the property is located, the water bill may have to stay in your name (i.e.
homeowner).

If the water bill must remain in your name, make sure to call the water company from time to time to make
sure the tenant is making timely payments.

Get to Know Them

Before we hand them the keys to their new home, we like to get to know them. We like to know what they
like to do, what their favourite restaurants are and other personal details. There are a couple reasons why we
do this:

1. It allows us to get to know them better.

2. It helps us to determine an appropriate gift to present to them when they move in.

We usually leave a $50- $100 gift card to a restaurant they said they like, a mall they like shopping at or for a
night out at the movies. This gesture helps strengthen the relationship by showing the future homeowner

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that you are thoughtful and considerate. In turn, the future homeowner is encouraged to do the same. It sets
a great tone right at the beginning of the relationship.
Remember, they are paying down your mortgage each and every month. A $50-$100 gift is not a lot of money
in the grand scheme of things.

We usually leave this in the home on the kitchen counter in a nice Thank You note or by a basket of flowers.

Once you hand them the keys to the house, let them know you will be in contact with them in a few weeks to
see how things went with the move.

Document Your Home’s Condition

Prior to them moving in, it is a good idea to take as many pictures as you can of your property. We do this to
have proof of what the property looked like prior to their moving in. For most of our homes, we do a video
walkthrough which is a great way of properly documenting the condition of your home prior to occupancy as it
provides evidence if you should ever need it.

You always want to make sure to properly protect yourself, especially when you are dealing with an expensive
investment such as a home.

Recap

In each meeting there should be a fair and equal exchange. In the first meeting you are signing the lease
agreement and they are handing over certified funds for first month’s rent, promising them the home if they
fulfill the rest of the agreement once additional funds are received.

In the second meeting they hand over the rest of the funds and you give them the keys to the property. It is
important to always get a certified cheque. I’ve said this a few times now to drive home the importance of
this.

When meeting with the tenants we prefer meeting them at their home or at a coffee shop. If I’m on the fence,
I’ll push to meet at their home in order to see how they live.

Do not meet with them at your home.

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 Moving On Up
Step 1. Send Them a Congratulations E-mail

After your tenants have moved in, give them time to settle in and unpack before giving them a call.

You will also want to visit your property from time to time to ensure that it is being maintained properly. I like
to get out to each of my properties at least once every 3 to 4 months. It’s a matter of personal preference,
time management and priorities. Some people will tell you to visit more and others will tell you to visit less.
Whatever you decide, it’s important to visit your investment on a regular basis.

Winterizing Your Home

An important visit to make is during the middle/end of the autumn season. You will want to make sure that
they are starting to winterize the home and all exterior hose bibs and valves have been turned off.

Don’t assume or leave anything to chance. Show them how to winterize the home, which will minimize risk
and prevent any unexpected repairs or damages.

Tell them to make sure they are changing the air filter in their homes every 3 months. This will help to extend
the life of the furnace.

Mail

From time to time, you may have some mail that will go to your rental property. We usually inform our
tenants to keep any mail that arrives and to let us know. We can then do a change of address with our local
postal outlet.

End Of The Year

When picking up the new cheques for the new year, we also make sure to give our tenants a nice holiday gift
as well. Some may feel that a gift is not necessary. We disagree.

This gesture is a token of appreciation and goes a long way in maintaining a strong and healthy relationship
with your tenant.

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 Some Tax Tips
This section is not intended to replace the advice of a tax specialist or an accountant. Providing extensive tax
strategies is another book. However, here are a few pointers that have helped us to stay organized and get
prepared for the annual tax filing project.

Create a file folder for each of your properties where you can separate your documents (examples of
headings:

 Mortgage
 Tax
 Insurance
 Postdated cheques
 Agreements
 Utilities
 Home improvements
 Closing docs

Keep receipts for any home improvements you have done to the property.

Make sure to open a separate account for each investment property. This is beneficial, especially at tax time
to calculate rent, service charges and other related expenses.

See our POST TENANT CHECKLIST below that we use after our tenants have moved in.

Post Tenant Checklist

After your tenant has moved into the property you will want to confirm the following:

 Confirm with the utility company all utilities have been transferred into the tenants name.
 Inform the tenant to notify you if any mail arrives.
 If the tenant has changed any of the locks ensure they have given you a copy of the keys.
 Take copies of all postdated cheques you have received.
 Create a file for your property where you can separate your documents.
 Keep receipts for any home improvements you have made to the property.
 If you have not opened a separate account for your property, do this ASAP.
 Visit your bank where your new account is set up and ask them to deposit your postdated cheques on the first of
the month. (Additional bank service charges will apply.)

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 Top 10 Things to Do For Rental Properties
We have acquired a lot of knowledge and experience over the years by following the footprints of other
successful investors. The knowledge we have learned and apply each time to any new properties we acquire,
is not always clear to the new investor. One of the key success factors is to follow solid guidelines and
establish good habits in order to minimize risk and maximize the return on your investment.

With that in mind, here is a list of the top 10 things to do when investing in Real Estate.

1. Deposit All Your Rent Cheques.

One of the strategies we use to help free up our time is to have our tenants give us postdated cheques for the
year and hand them into the banks. For a small fee they will automatically deposit these cheques into your
account without you having to remember each and every month. Now, your tenants are not obligated to do
this however, if they do, it’s a huge time saver for everyone.

2. Visit Your Property.

When investing in Rent to Own properties the maintenance is usually kept to a minimum since your tenants
are responsible for minor repairs. Your tenants move in knowing they are going to own the home in a few
years and are willing to maintain your home. With that being said, it's still important as an investor to visit
your property from time to time since you still own the home.

3. Set Expectations Up Front.

Set the ground rules up front and be very clear with your delivery. It is important that they know when rent
needs to be paid and if it is not, you will officially notify them by proceeding with the eviction process. It is
important to follow this process to avoid things from spiraling out of control.

5. Insurance.

There are many insurance plans for your property. Make sure that you get the right plan and enough
insurance to cover your home by talking to your insurance agent. A well designed insurance package can
protect you from losses caused from fire, storms, vandalism, and personal injury and discrimination lawsuits.
Remember, it’s all about minimizing risk.

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6. Give Them a Gift.

We’re big on this one! For each of our tenants, we give a gift valued between $50 to $100 at year end. This
may sound like a lot but, how much of your mortgage did they pay down this year for you? After you take this
into consideration, you'll see it's not much at all. If you are not big on gifts, then consider sending them an
e-card or calling them on their birthday. It will go a long way in maintaining a solid relationship.

7. Keep Your Receipts.

They all add up in the end…literally. Maximize your tax savings by getting into the habit of keeping all your
receipts related to your Rental properties. When you are investing in real estate, there are many expenses
you can write off such as signage, telephone, photos for advertising, and much more.

8. Have a Good Accountant.

If you are investing in Real Estate, make sure you have a good real estate accountant. Don't attempt to do
everything yourself. Let your accountant focus on accounting while you focus on investing.

9. Keep an Eye on Your Accounts.

No matter how good your cash flow may be, keep an eye on your accounts. Make sure the appropriate bank
fees are coming out, the taxes are accurate, your home insurance is correct and if tenants’ cheque bounces,
you take immediate action.

10. Take Action.

It is important to do your homework and have a good understanding of what you are getting yourself into.
Once you have done that, just do it! You will make mistakes along the way, which is normal. It is a part of the
learning process. We have made our share of mistakes, but we have learned, we have grown and we can now
share our knowledge and experience with others.

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 About The Author

Never in my wildest dreams did I think I would be able to break the corporate chains, start my own Real Estate
Investing company and help educate 100’s of individuals create a lifestyle they never thought possible. Since
2008 I decided to change one simple thing, my philosophy. In a few short years I’ve been able to design each
day, week and year by following a few simple disciplines I’ve learned through seeking out some of the best
mentors in the real estate investing industry.

In 2013 I acquired my Real Estate license and in 2014 the corporate world was left behind to chase a different
dream.

Each day I get to work with investors wanting to make a difference in their lives by taking action.
Being able to design a lifestyle of your choice is not an easy feat however, it’s attainable as long as you have
passion and know what your “why” is.

My Goal? To assist others with finding what they’re “WHY” is. At the beginning of this incredible journey I
heard this from Zig Ziglar. “Help as many people get what they want and you can have everything and
anything you want.” No more excuses, go and get what you desire and I hope to see you soon.

If you are ready to step onto the path of financial freedom, contact me at smarthomechoice.ca.

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