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HOW TO SCREEN THE RIGHT TENANT

Let AspirePeak Properties Ltd. Take Care of Your Calgary Rentals

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Tenant screening is one of the most crucial steps in rental property management. Finding the right tenant can mean the difference between a profitable, stress-free investment and a costly, time-consuming ordeal. In Alberta, landlords must follow a structured process to ensure they select responsible and financially stable tenants while complying with legal regulations.

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1. Establishing Financial Criteria: Rent-to-Income Ratio

A key financial metric landlords should use is the rent-to-income ratio. A reliable tenant should ideally spend no more than 30-40% of their gross monthly income on rent. This ensures they have sufficient funds to cover other living expenses and financial obligations.

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Example Calculation:

  • Monthly rent: $2,000

  • Required income range: $5,000 - $6,667 per month

  • Annual income requirement: $60,000 - $80,000

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A tenant earning below this threshold may struggle to consistently meet rent payments, increasing the risk of missed or late payments.

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2. Credit Score Assessment: Good vs. Average vs. Poor Credit

A credit report provides insight into a tenant’s financial responsibility. In Alberta, landlords can request a credit report through Equifax or TransUnion with the tenant’s permission.

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  • Good Credit Score (700+): Indicates strong financial responsibility, on-time bill payments, and a low risk of defaulting on rent.

  • Average Credit Score (650-699): Represents some financial risk. The tenant may have a history of late payments or higher debt levels but is still generally reliable.

  • Poor Credit Score (Below 600): Suggests high financial risk, frequent missed payments, high debt, or past bankruptcies. A tenant in this category may require a guarantor or higher security deposit.

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3. Employment Verification & Proof of Income

Verifying employment and income ensures a tenant has a stable financial situation. Landlords should request:

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  • Recent pay stubs (typically the last 30 - 60 days)

  • Employment letters confirming salary, position, and length of employment

  • Tax returns or bank statements for self-employed applicants

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A long-term, stable job history is a good indicator of financial reliability.

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4. Checking Landlord References: Why It’s Essential

Contacting a tenant’s previous landlords is one of the best ways to assess their rental history. A reference check should confirm:

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  • Whether the tenant paid rent on time

  • If the tenant caused property damage beyond normal wear and tear

  • If they were financially responsible for another lease at the same time

  • Any history of evictions or disputes

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Red flags include vague or hesitant responses from a landlord, reports of unpaid rent, or lease violations.

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5. Pet Screening: What to Do

If a tenant has pets, landlords should:

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  • Request a detailed pet application including breed, size, and behavior history.

  • Ask for pet references from previous landlords.

  • Ask for vet records showing spay/neutered pets and all vaccinations are up to date.

  • Set clear pet policies in the lease agreement, including noise control and cleanliness expectations.

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6. Criminal Background Checks

While Alberta does not mandate criminal background checks, landlords may consider this step to ensure the safety of their property and other tenants. However, it is essential to follow fair housing laws and avoid discrimination.

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7. Comparing Applications: Poor vs. Average vs. Good

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Poor Application:

  • Rent-to-income ratio exceeds 40%

  • Credit score below 600

  • Negative landlord references (unpaid rent, damages, evictions)

  • Incomplete application or reluctance to provide necessary documents

  • Unstable employment or unverifiable income

Average Application:

  • Rent-to-income ratio between 35-40%

  • Credit score between 650-699

  • Neutral to slightly positive landlord references

  • Some minor issues, such as past late payments

  • Stable employment but lower-than-ideal income

Good Application:

  • Rent-to-income ratio below 35%

  • Credit score 700+

  • Strong positive landlord references

  • Stable employment history and consistent income

  • Complete and transparent application

  • No prior evictions or major lease violations

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8. AspirePeak Properties Tenant Selection Process

AspirePeak Properties sets out what a good application looks like and how we proceed with moving that good application in. If an application meets our standards, we take the necessary steps to finalize the lease and ensure a smooth transition for both the tenant and the property owner. If we receive a poor or average application, we follow the procedures outlined in our management agreement. We will always consult with the owner for approval before proceeding with an application that does not meet our ideal criteria.

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9. Legal Considerations & Privacy Regulations

Landlords in Alberta must comply with privacy laws when collecting and storing applicant information. This includes:

  • Obtaining written consent for credit and background checks

  • Keeping applicant data secure and confidential

  • Avoiding discrimination based on race, religion, gender, or other protected categories under human rights laws

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Final Thoughts

A thorough tenant screening process helps protect your rental property and ensures a reliable income stream. By evaluating a tenant’s financial stability, creditworthiness, rental history, and overall suitability, landlords in Alberta can confidently select the best candidate for their property. Always adhere to provincial laws and privacy regulations when collecting and storing applicant information. Investing time in proper screening today can prevent costly problems in the future.

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