How To Prevent Tenant Fraud…
While this is certainly more convenient, it also means that identity fraud is a bigger risk…
The application process for many renters has moved entirely online. While this is certainly more convenient, it also means that identity fraud is a bigger risk. Luckily, once you know and can recognize the signs of fraud, you’re less likely to be taken in by one. Average tenant turnover costs for landlords can be about $2,500, which includes getting the property ready to re-rent, marketing, and leasing it to new tenants. If tenants do damage to the property, the cost to turn over the property will be even more expensive and will delay move-in for future tenants.
With all the things going on in the World, Inflation at an all time high, people are getting desperate to rent or even purchase food or services.
Tenant scams take advantage of unassuming landlords who fail to implement the right procedures for screening renters, writing contracts, and collecting payments. These scams (e.g., submitting false employment records, faking credit reports, forging checks and pay stubs, attempting to reset the eviction process, stealing your listing, and hiding property damages) come in different forms, costing landlords valuable time and risking their incomes and businesses.
To avoid these, we’ve exposed 15 tenant scams that should raise a red flag to landlords, along with tips on how to prevent them effectively.
- Giving Fake Checks for Rent & Security
- Writing a Check Larger Than the Move-in Amount
- False Employment Records – In a recent study by Snappt, 66% of property managers said they had received fraudulent applications. Tenants will provide fraudulent employment history and ask friends or family to act as the employer contact to falsely verify employment on their behalf. Tenants may do this because they don’t have steady income streams, which may bring concerns to the landlord regarding a tenant’s ability to make rent payments.
- Providing a Fake Credit Report
- Renting on Behalf of the Owner
- Fake Pay Stubs
- Tenants Doing Things to Reset the Eviction Process
- Stealing Your Listing – significantly lower monthly rent to attract unsuspecting renters
- False Rental History Verifications
- Using Residential Property for Commercial Usage
- No Intention of Paying the Rent – One example is RentPrep, which provides tenant screening products to help landlords quickly fill their vacant properties. RentPrep is geared toward smaller landlords who do not have the same resources as large management companies to be able to perform the same tenant screenings at an affordable rate. The platform provides an easy way to verify the income of self-employed applicants and performs credit checks to understand a tenant’s ability and intention to pay rent.
- Hiding Property Damage When Moving Out
- Unexplained Urgency to Rent
- Lying About Co-tenants
- Service Animal Discrimination – Owner-occupied buildings with no more than four units, single-family homes sold or rented without a real estate broker, and property owned by religious or private clubs housing their members are all exempt from the housing discrimination laws.
Although you cannot be 100% certain that a tenant is not a scammer, having a thorough tenant screening process can ensure you are putting the best tenants in your units. Understanding these tenant scam tactics can help you identify red flags and protect yourself when a tenant might be taking advantage of you.
source; FIT SMALL BUSINESS 2022