Landlord Diaries: Finding the Perfect Tenant and Setting the Right Rent
Landlord Diaries profiles different types of landlords, sharing their hard-won lessons learned along the way.
In 2005, Nina Pak-Lui and her now-husband Jason, almost accidentally fell into buying a rental property in Vancouver’s South Granville neighborhood. Both working in education, at the time they bought the ’70s-style, low-rise apartment unit on just one teacher’s salary. Since 2012, they’ve had the same tenant renting the 750-square-foot corner unit and they continue to leverage their investment to reach their future goals – and hopefully those of their children one day too.
Now, twelve years later, Nina (who lives with Jason and their two children in the Surrey, BC, neighborhood of Fraser Heights) reflects on the importance of good advice and shares her secret to finding a good tenant.
Pendo: You and your husband work in education with two kids and a townhome in Surrey – how did you manage to invest in a Vancouver rental property?
Nina: My husband and I are both city people – he was born and raised in East Vancouver. When we were given a sum of money by my in-laws to go towards getting married, we decided we weren’t ready. Instead, we put that money towards an investment property in Vancouver. At the time, prices in Vancouver were starting to steadily climb, so we took advantage – even though Jason was unsure. It was still affordable.
P: Your tenant has been with you for five years, what’s the secret to finding a good fit and keeping them?
N: When we were looking for this tenant, we talked with an owner across the street. He’s the father of our accountant, but also a building owner and property manager. He told me to do a market analysis to price the unit in a way that would attract the best tenant. I wanted to be fair, but not undercut the place. And ultimately, this attracted the type of people I was looking for – I wanted to rent to professionals.
P: So your current tenant fits into that group. How did you find previous tenants?
N: Our first tenant was a close friend. Then, when she moved to Europe, we sublet the place to a couple from Montreal. We’d never met them – I communicated with them over email. I was feeling nervous and scared, but I read the tone of their messages and I trusted my gut instinct. They seemed trustworthy and reliable – it turned out to be a positive experience. They were civil engineers so they actually gave us tips on how to spruce up the unit.
After that Jason and I lived in the place for a few years – we had our first child there. At that time, it shifted from investment property to the first place we lived together, so there’s quite a lot of an emotional attachment there.
P: How has that emotional attachment shaped your experience as a landlord?
N: When we were looking for a tenant to move in after we moved out, we had 15 people interested in the ad we posted. The same person who gave me advice about pricing also told me to trust my gut instinct. I think because of the attachment I had, this made sense to me – I wanted to show whoever was reading the ad that this place was important to me. I made sure the ad featured a lot of detail and even had it reviewed by a friend who is a professional writer.
P: And out of the 15 applicants, how did you decide which one was the right one?
N: Our tenant was the only applicant that communicated in a genuine way that she really loved the place. I knew she would treat it like her own – I just had a feeling. After she left, I told my husband that she was our tenant. I actually didn’t do a credit check, but I would in the future. I don’t think I’d advise others to do exactly what I did, but moving forward my checklist would be a gut feeling, a credit check, and an employment check. Mostly, I’m looking for a person who will love living in my home – not just another tenant.
P: When you were pricing your unit, what was your strategy, besides looking into market rates?
N: We made sure that the costs covered the mortgage, strata fees, property tax, as well as maintenance. On top of the rental income, we also had a contingency fund for repairs that we knew were upcoming – like replacing the roof, which we learned through the home inspection, and the elevator replacement, which was detailed in one of our annual general meetings.
We’ve always made sure the rental cost was allowing us to at least break even. I’m not making a massive amount of income each month, but even with an investment property, I get a tax break on my expenses. I just don’t want to be going into the negative. Our pricing has to do with financial planning. It’s not about all the extra income I could be making from her rent – the value is more from the increased real estate property value.
P: What do you see this property allowing you to do in terms of your future goals?
N: I hope that one day my kids might live there or that we’ll be able to use equity to help them buy their own place. We own our place [in Surrey] now and it is walking distance to work. We pulled some equity out of the apartment to do that – we used it as a stepping stone. Long term, we’d like to see ourselves back in Vancouver. Everyone seems to be priced out of Vancouver, but with these two properties it’s kind of a possibility to go back.
I don’t have any big goals to be super wealthy, but I want to be wise with the decisions we do make with our money. Without this place, we wouldn’t have been able to earn the equity we have.
P: With the current rental market, do you ever think about charging more for the unit?
N: I could definitely be renting it for more. Knowing the potential to earn is higher, sometimes I feel like I’m losing out on income, but I also don’t want to lose out on having a great tenant. It’s also about ethics. I don’t necessarily need more to cover the costs of the place so my ethical brain is like “this is her home” – the fairness to the renter is important to me. I don’t want to be a greedy landlord. I want to treat my tenants the way I wanted to be treated. I want her to enjoy living there – to be a good steward of my investment.
P: And it sounds like she is! Are there ever challenges in being a landlord?
N: There are challenges, but they’re mostly related to time and distance. From where we live now, it’s around 35–40 minutes to the apartment. To get out there, it takes some pre-planning. Sometimes it can be inconvenient to make that trip out, but it’s worth it. There’s still this emotional, sentimental attachment to that place – we’re not the type to neglect it.
P: What tips do you have for first-timers?
When the tenant is ready to move in, present the place to the tenant the way you would want it back if they were to leave. When finding a tenant – some people might disagree – but go with your gut. It’s always worked for me. You also need to make sure communication is open and that you care for the place. Even though I’m not living there, I treat it like my own. That said, it’s important to me as a landlord that she feels comfortable in her place. In my mind, it’s not solely our place anymore, it’s also her home.