How to feel safe with tenants in your home

8 Proven Ways to Feel Safe and Secure with Tenants in your Own Home

How to feel safe with tenants in your own home (1)Here is a great guest post from Daria, a savvy investor on how to feel safe and secure with Tenants in your Own Home.

Adding a rental suite in your home could be your secret key to a beautiful home in a great neighbourhood without draining your life savings.

TV shows like Income Property have popularized this concept of adding rental suites to your home. For many people living in expensive cities, it is the smartest and most affordable way to keep up with rising home prices.

But do you know how to protect yourself when adding a rental suite to your home?

And are you ready live with complete strangers?

Seven years ago, I added a rental suite to my own home and fast tracked my mortgage pay down. To date, I’ve generated more than $100,000 in gross rental income, which has brought me much closer to my goal of being mortgage-free.

Financially, this was the smartest decision I’ve ever made.

But I was also nervous about the thought of living with complete strangers.

I got over my stranger danger trepidations by conducting a lot of research, reading a lot of books, learning from other real estate experts and applying sound advice. After all that homework and three tenants during seven years, here are 8 proven ways to feel safe and secure with tenants in your own home.

1) When preparing your space…

Is your unit set up for safety? This is the first place to start when you are thinking about securing your investment and feeling secure when sharing a home. Every suite should have fire safety doors and an extinguisher in the kitchen. There should be fire resistant insulation behind the walls and between the floors. Tenants should have a separate door to their suite and a separate one to the home. Each door should be outfitted with two locks for added security. Think about installing a security alarm, as well. Also, look into increasing insurance coverage, getting rental loss insurance and beefing up your lease to ensure that tenants are responsible for their own content insurance.

2) When advertising…

So your ad is up on Kijiji, Craigslist, Padmapper or whatever online listing service is popular in your community. Let’s be honest — these tools are used by good and bad people. Never publish your address in a listing ad. Use the address of the nearest retail store, library or public building in your neighbourhood. Pre-screen your potential tenants over email to save you time. Complete your second screening on the phone asking probing questions of what the tenants are looking for. If both screenings are positive, share your address with this person over text message. While this strategy might limit your tenant pool, the upside is that it adds security to you.

3) When showing…

To save you time, book all your showings in an open house style on weekend afternoons. Not only is that a safe practice, it also encourages friendly competition for the unit. Make sure that someone is always home with you when greeting prospective tenants. If people knock on your front door, open it, but send them to your rental suite’s separate entrance so they don’t have to go through your personal space.

 4) When screening…

So you have a stack of tenant applications and you’ve asked for all the right information: employer, landlord and professional or personal references (I usually ask for two in each category per tenant), salary, financial obligations, credit check, driver’s license numbers, date of birth, etc. But did you follow through and call every reference? Did you verify every piece of information? Did you ask open-ended questions and listen for cues and clues about the prospective tenants’ credibility? Did you ask to see their driver’s license to ensure they are who they say they are?

The internet is your best friend when it comes to screening. Use pipl.com, a search engine that crawls the web for anything that it related to a name. Conduct searches on LinkedIn, Facebook and Instagram to see what comes up. Go to employer websites to search the individuals by name. Look up phone numbers for employers and any landlords, rather than just going by the numbers given in the application. It’s a very easy way to see if the information matches up.

5) When deciding… 

Look for signs. On the back of each application you receive, write down your observations and check your gut feeling about the tenants. Here are a few questions to ask yourself:

  • What was the nature of our communication like throughout the process? Did they respond to me in a timely fashion?
  • What questions did the prospective tenants ask about the suite?
  • Did they answer all my questions?
  • Did they present themselves well? Did they take their shoes off in the suite proactively?
  • What did their car look like on the inside? Tidy or messy?

Many tenants may check out on paper. But what does your gut say? Do you have any reservations? I remember watching Oprah when I was younger and the one thing I always took away from many of her interviews was to trust your instincts. Does something feel uncomfortable? Is there something that is bothering you about the prospective tenants that you can’t quite put your finger on? As long as you’ve have taken the right steps to provide a fair screening process, it ultimately comes down to fit. It’s important to choose someone you feel you can trust.

6) When finalizing…

Make sure you have a bullet-proof lease. This includes paying close attention to clauses around subletting and overnight guest policies. Protect yourself by adding a clause that prohibits subletting. Consider adding a policy for not allowing overnight guests to exceed a set number of days in a set period of time. These clauses are increasingly important to consider because some tenants may want to leverage the suites with short-term or vacation rental services like Airbnb. When this type of subletting is permitted, your safety risks go up with the amount of guests turning over in your unit and accessing keys.

When sharing a home, security is everyone’s responsibility. During the move-in inspection, work hard to set expectations to include: close windows and lock doors before you leave anywhere; notify me of longer absences; give me a heads up if you have overnight guests staying for longer periods of times; don’t make copies of the keys. Oftentimes these are asks that you can’t demand as a landlord, but you can nurture your relationship with your tenants to encourage communication. Similarly, share the same information with your tenants.

7) When living together… 

Relationship building with your tenant is important. That said, you aren’t room-mates. Even if your tenant suite is in your principal residence and the living arrangements can feel quite personal, you have to remember that you are still running a business. That means no ‘extended hours’ unless it is an emergency.

Don’t open the door every time your tenant knocks at 8 or 9 p.m. Encourage your tenants to text you simple questions. Be in control of how and when you choose to respond. Email asks are appropriate for any more involved asks, and also important from a paper trail point of view. If you need to go downstairs to inspect something in their suite, make an appointment with the tenant. If it’s urgent, make sure that someone is at home or a neighbour is on standby. Meetings are always held in the tenant suite – never in your home. And these rules don’t change even if I’ve known the tenants for a longer period of time.

Protect your personal information. Just because you share a home doesn’t mean that tenants should have all your personal contact details. Create a unique email address that deals with tenant communication. Leverage services that create a business phone number that is still tied to your personal line (line2netTALK) or download online apps that create a separate phone number via a WiFi or data connection.

8) When you don’t feel safe…

There are times when you may not feel safe. I was recently in this situation: a new tenant couple was in the unit for only three weeks when they had an argument and damaged the suite. The situation escalated to a police call. This was a very difficult situation that ultimately resulted in my husband and I asking the tenants to leave. That said, it was important that we are compassionate with the tenants to create a win-win situation. Everyone can experience hardships in life, so we gave these tenants two months to find alternative arrangements. However, since that incident, we didn’t feel as safe living with these tenants. Since the tenant landlord relationship had such a rocky start, it was best for all of us to move on. We offered to help them search for another place and we even gave them back their last month’s rent. We were fortunate that the situation was resolved diplomatically. At times, you may have to take the steps to legally evict a tenant, which can be complicated, time-consuming and expensive. That’s why taking the right safety measures from the start when screening and selecting tenants is so critical.

And when you do feel safe, you also feel financially secure.

If you don’t think I’m paranoid yet, and you are still with me, being a landlord was the best decision I ever made.

I am creating financial security for my family by using my current home to pay down debt and create wealth in the long term. My goal is to be mortgage-free within the next three years. Once this happens, I will turn our home into a fully rented duplex and purchase a new principal residence. I’ll then use the $3,000+ in monthly cash flow from the rented duplex towards mortgage pay down of my new principal home.

Now that’s a safety net I’ll invest in for my future.

Daria HillAuthor Bio: Daria Hill is a communications consultant by day and a student of real estate investing every other spare minute. Daria lives with her husband James, a real estate agent with Royal LePage, and their daughter in Toronto.  With a love for demolition, design and daydreaming, she is always looking to roll up her sleeves for the next project. Daria currently owns two investment properties but is keen on building her portfolio.


What are your tips for feeling safe and secure renting to tenants in your own home? How was your experience owning a rental suite in your own home? 

2 Comments

  • Alexander
    Twitter:

    Reply Reply April 14, 2016

    Great article Daria,

    This is a great way to begin a real estate investing journey. Im really glad to hear it has worked out for you and I can imagine how daunting this could be at the beginning.

    Congrats!
    Alexander recently posted…Blog Income Report and Traffic Stats – March 2016My Profile

    • Daria

      Reply Reply April 15, 2016

      Thanks Alex. Adding a basement suite to my principal residence was the best decision I made. It’s been worth giving up some personal space and learning to live with ‘strangers’.

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