How to Avoid Today’s Top Tenant Scams

by Chris on October 21, 2019

In a tight rental market, landlords need to tighten their tenant screening practices as well. Tenants who never gave a second thought to late rent payments or property damage now can find themselves unable to qualify. So, they get creative.

Social media makes it easy for tenants to share their thoughts and ideas when it comes to scamming landlords. Fortunately, landlords can view some of these posts, too, and learn to spot today’s most prevalent tenant scams:

1. Target an experienced or lax landlord because they don’t do tenant background checks.

The simple fix: Demand a tenant background check. No exceptions.

2. Supply a fake credit report.

Credit reports need to come directly from the credit bureau to guarantee the report has not been altered. Cut out the “middleman” and prevent tenant fraud.

3. Don’t provide your previous address on the rental application.

Tenants often believe that an omission is not the same as telling a lie. Warn tenants that incomplete applications will not be considered.

4. Use the wrong number for your previous landlord.

This trick is as old as the hills, but still in play. Explain that the application will not be processed if references cannot be reached.

5. List a work reference who doesn’t work there anymore.

Demand supplemental documentation to prove employment and verify income and warn tenants that inaccessible references will stall the application.

6. Offer to pay cash (or higher rent) to avoid a credit check.

Too many landlords fall for this trick. The tenant may have cash now, but not three months from now. A promise to pay higher rent rings empty when the tenant isn’t planning to pay rent. Don’t be fooled. Make verifiable income a qualification requirement. Also, sign up to Report Rent Payments with TVS and warn tenants that late or missed payments will only make their credit problems worse.

7. Move in with someone else who has better credit or rental history.

Ask for a list of proposed occupants and demand that all adults complete rental applications. Explain the guest policy to applicants — and the consequences for unauthorized guests.

8. Lie about pets (or non-smoking, or additional occupants).

Intentionally concealing information to scam a landlord is fraud, and tenants should be warned about that. Explaining that a lease-breaking tenant will be evicted — and will need to move once again — can prevent this scam.

9. Leave pet information (or smoking preference) blank on the rental application.

Adopt a standard policy of rejecting incomplete applications.

10. Inflate income.

The most brazen scams involve inflating income. These tricks range from adding a year-end bonus to monthly income to scanning and doctoring pay stubs, depositing borrowed money, or hiring a third-party to falsely verify employment. That’s easier than you might think. Today, for about $75, a tenant can create fictional employment, income, and reference online. These fake verification companies have gone so far as setting up websites and advertising on Craigslist.

Landlords should avoid online applications where supplemental documentation easily can be altered. It is also important to run a tenant credit check on the finalist to verify that employment history and credit match up.

These common tenant scams — and others — can be avoided simply by following a tried-and-true tenant screening policy:

When advertising a vacancy, state that a tenant background check will be required;
Prequalify applicants over the phone and create a baseline of information to compare to the rental application;
Verify the applicant’s identity with a photo ID;
Demand a fully completed rental application and supplemental documentation;
Include language in the rental application that warns of the consequences of false or incomplete information;
Verify the information in the application, including checking references; and
Run tenant screening reports to verify that the applicant is qualified.

Not all tenants are scammers. Some make innocent mistakes. Others have spotty records but still may be good tenants. Assure prospective tenants that some problems can be resolved and encourage these applicants to be upfront about those issues. Convince applicants that honesty is their best option — and make it easier for them to do the right thing.

This post is provided by Tenant Verification Service, Inc., helping landlords reduce the risks of renting with fraud prevention tools that include Tenant Screening, Tenant Background Checks, (U.S. and Canada), as well as Criminal Background Checks, and Eviction Reports (U.S. only).

Click Here to Receive Landlord Credit Reports.

Disclaimer: The information provided in this post is not intended to be construed as legal advice, nor should it be considered a substitute for obtaining individual legal counsel or consulting your local, state, federal or provincial tenancy laws.

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While lawmakers are looking for ways to accommodate more renters, like California’s new push to license in-law suites, many property owners are taking advantage of the hot market and renting out their homes rather than selling.

And that means more people are becoming landlords — many of them for the first time. To be successful, they will need to find the right tenants and reduce liabilities — and come up to speed quickly. That means employing the same strategies as the pros:

Professionalism
New landlords often begin their tenure by trying to be their tenant’s friend. They’re nice, laid-back, easygoing. It’s surprising how many times that comes back to bite them. What inexperienced landlords perceive as benevolence, some tenants see as an opportunity to walk all over this newbie. The landlord loses control, and the tenant takes advantage.

Tenants do not have to like their landlord — they need to respect the landlord. That results from professionalism. No emotion, no conciliation, no hanging out and having a beer. Tenant shouldn’t be afraid of their landlord, but they should be mindful of who’s in charge.

Forget About the Ideal Tenant
Looking for a specific type of tenant? That’s a common mistake of first-time landlords. When advertising for a tenant, there should be no preconception of that person’s individual characteristics other than the qualifications for the rental — sufficient income, decent credit, and good rental history.

Imagining the perfect tenant is like putting a target on your back. Problem tenants know the drill: dress the part, tell a good story, wave around some cash, or use a fake reference, and avoid a tenant background check. Then, the tenant can live rent free while the new landlord learns all the ins and outs of eviction court.

Avoid Overdressing
Experienced landlords know not to overdo it when it comes to sinking money into designer touches. Many new landlords are leasing out their own homes. It always come as a shock when a tenant doesn’t want to dote on the property or doesn’t appreciate the fancy details. No tenant is going to care for a rental as well as the owner — the one who suffered through weeks of renovations to get exactly what they wanted.

Landlords only can recoup damage a tenant causes, not the wear of ordinary use. The house is not going to look the same when the landlord-owner takes it back. So, be prepared.

Because wear and tear is not the tenant’s problem, landlords should avoid finishes that won’t stand up, or waste investment money with magazine-worthy designs. Keep it neutral, tough, and easy to clean — unless you want to remodel every time a tenant scuffs the floors or leaves a water ring on the countertops.

Safety is Key
Landlord liabilities revolve around tenant safety. Features like carbon monoxide and smoke detectors are inexpensive, prevent injuries or death — and the resulting lawsuits, and often are mandated by law. Deadbolt locks are a must-have. Clear pathways and lighting around parking areas prevent injuries and crime.

In addition to providing reasonable safety features, landlords must frequently inspect the property and make repairs to ensure that those features remain in good working order.

Absentee Landlords
New landlords who are relocating a significant distance away and renting out their previous homes are at great risk for income loss. Renting “absentee” is not a viable option. Tenants who are put in charge of caring for the property alone — supervising repairs, doing all the maintenance, solving disputes — are notorious for causing property damage and defaulting on rent.

The best solution for long-distance landlords is contracting with a local property management company to oversee day-to-day issues, perform periodic inspections, and keep the property in good repair for the duration of the tenancy.

This post is provided by Tenant Verification Service, Inc., helping landlords reduce the risks of renting with fraud prevention tools that include Tenant Screening, Tenant Background Checks, (U.S. and Canada), as well as Criminal Background Checks, and Eviction Reports (U.S. only).

Click Here to Receive Landlord Credit Reports.

Disclaimer: The information provided in this post is not intended to be construed as legal advice, nor should it be considered a substitute for obtaining individual legal counsel or consulting your local, state, federal or provincial tenancy laws.

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