Finally! You found some great tenants and you are so excited to finish up all the administrative work and get them to their move-in date.
Great tenants are no guarantee. Before you entrust your rental property to just anybody, it is a good idea that you take a look at your tenant screening process to make sure everything is as it seems— so you don’t find yourself pinned in the middle of a scam.
Tenant fraud is real. And, unfortunately, the tenants can seem very real. This is why it is so important to take the tenant screening process seriously, thoroughly reviewing everything along the way.
Particularly, here are 5 things to check to help prevent tenant fraud.
1. Insist on pulling your own credit report – then review it. Sometimes tenants will bring their own copy of their credit report to avoid having to pay the fee for you to pull it. Sadly, though, with all the capable technology out there, it is not always safe to assume that it is a legitimate report. It could have been altered in one way or another that may not be so easily noticed.
In addition, when reviewing a credit report, never settle for just the score. Why? Because the score doesn’t give you the whole picture. For instance, the applicant may have a fairly decent credit score, but quite a few late payments or other negative marks.
2. Always check the proof of income. When you are considering renting your property to someone, their level of income is important. After all, this is how you are going to get paid each month. So, what if the documents you are shown as proof are fraudulent?
Check stubs can be altered, as well as tax documents. Plus, did you know you can purchase these fraudulent documents online?
Review the documents you receive for proof of income by contacting the employer and confirming the information.
3. The tenant switch. When your potential tenant comes to check out the property, who comes along, too? What is the reasoning for the additional individual/s? It is important to note that potential tenants who are unable to secure a rental on their own may pay an outsider to pose as the applicant. This means that all the documents you receive will look legitimate. In fact, they will likely be legitimate.
You will have no idea who the tenant is that is living in your rental.
4. The check for too much. Your future tenants are so wonderful they gave you a check for too much money and ask that you refund them the difference. If this makes you think that your tenants should have no problem paying their rent, think again. If it sounds too good to be true… you know the rest.
You have likely just been scammed. What happens is the check you received is really no good. So by the time you refund the scammer the rest of the money, your bank is alerting you that the check was fraudulent – and now you are out of even more money!
5. Look for loopholes. When you are showing the place, going over the application, and so forth – talk to the potential tenant. Eventually, if they are hiding something, your intuition will alert you. If something doesn’t sound right – or the paperwork does seem legit - it probably isn’t.
Tenant screening is one of the most crucial parts of having a rental property. Be smart and diligent to prevent tenant fraud.
Marina Shlomov, a managing partner at ALH|Podland Realty and Atlanta Rental Homes Property Management is the author of many articles on Landlording, Real Estate, Rental Property Management, Atlanta Property Management, and Real Estate Investing. A residential builder in the state of Georgia since 1999, Marina is an investor herself. Her Atlanta property management company is intended “For Investors” and “By Investors” for a simple reason – she knows what investors’ goals are and she works hard to reach their goals. In her spare time, Marina likes to spend time with her family, friends, garden, read and travel. Check her out at www.alhpodland.com. You can find Marina’s articles and comments at @rentalhomesatl on Twitter, on Facebook, Google+, Blogger. and YouTube, BiggerPockets and REI CLub and LinkedIn.