If your 2021 strategy is to wait out the seller’s market in a rented home, you are in good company. For a variety of reasons, it is not uncommon for families to rent for a time after selling their current property.
However, a common misconception among renters is that because many areas of the GTA are experiencing a seller’s market, tenants must have the upper hand in leases. Surely there must be a whole host of options and all kinds of time to make a decision.
You may need to recalibrate your thinking on that one.
While there may still be plenty of options available for certain types of condominium leases, the vast majority of rented houses are in very high demand right now in Oakville and Milton. If you want to secure your preferred property, you may need to move almost as quickly with the offer to lease as buyers would with an offer to purchase.
Preparing in advance for your offer to lease can make all the difference when you find yourself in competition for a rented home.
Let’s take a look at 5 things you can get lined up ahead of time that will give you the edge you need.
1. Rental Application
When working with a REALTOR® to find a rented home, you will be asked to fill out and sign a rental application. This is a standard document developed by the Ontario Real Estate Association (OREA). It outlines the details of the primary tenants and other occupants, renting and employment history, financial obligations, and references.
The rental application form also requires your signature confirming that the information is correct and authorizing a credit check.
Landlords working with a real estate salesperson will require this document to be submitted at the same time as the offer to lease.
Filling it out as early as possible in the process can save you time and aggravation on the day you decide to place an offer on a home to rent.
2. Credit Report
When a formal credit check is done by lenders, financial institutions, or other companies, your credit score may takes a hit of a few points. Securing your own complete report from Equifax or TransUnion is what’s known as a soft inquiry and your credit score is usually unaffected.
Smartphone apps like Borrowell can provide you with the same credit score information. That said, while some landlords may find a screen shot sufficient, others may not, so it’s worth considering having your own report ready to go in case it’s needed.
3. Proof of Income
Homeowners want to know that prospective tenants have the financial resources to support monthly rent payments. As a result, most landlords are looking to see a current letter of employment along with recent paystubs for each of the primary tenants.
Since it’s not always easy to secure a letter of employment quickly from a typical HR department, it may be worth considering approaching your employer in the early days to allow for delays so you have it on hand when you need it.
As the rental market continues to bustle along, backing up your offer to lease with your rental deposit will be key to securing the home.
While submitting the deposit with the actual offer to lease may not be necessary, in most cases you will need to be ready to supply first and last month’s rent within 24 hours of the offer being accepted by the landlord.
5. Agreement to Lease
The Agreement to Lease is the residential leasing equivalent of the Agreement of Purchase and Sale. It is a standard OREA form that sets out what you are offering the landlord in terms of monthly rent, and the duration of the lease period. Note that most landlords require a minimum of a one-year lease term.
Along with several preset clauses, the Agreement to Lease also includes a Schedule A which is where you would include conditions similar to the way you would with a home purchase.
For example, perhaps you would like to include a clause requiring that the landlord not rent out the basement during the term of your lease, or a condition that the homeowner agrees to permit cosmetic changes to the home with advance approval.
Speak with your REALTOR® ahead of time about which clauses they recommend including that may apply to your specific situation. As with an agreement of purchase and sale, the purpose of including conditions in an offer to lease is to protect your interests.
With the rental market for single family homes moving quickly, waiting until you decide on the rental property before preparing your documents could delay or even prevent you from securing the home you want. In fact, it’s becoming more common for rental houses to go into multiple offers.
Having all your documents ready and providing them to your REALTOR® in advance means that when you decide to pull the trigger on an offer to lease, you are already way ahead of others that may be interested in the same property.***
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