Prospective Tenant Fraud: How to Properly Identify It
You simply cannot trust everybody – and, sadly, that includes your prospective tenants. We want to believe that people are genuinely good. And, while they usually are, attempts at committing fraud by tenants is on the rise. Therefore, it is imperative that you take steps to protect yourself. Learn to identify the most common scams happening today. Here’s what you should be looking for:
A fully completed application – with illegible writing. It's easy for potential tenants to complete an application so it looks legitimate and simply appears to have bad handwriting. However, if you assume you can’t read something just because of the bad handwriting, it could be because it was intentionally not meant for you to read.
Stories that don’t seem to line up. Ask questions and then listen. Get the potential tenants talking, but be sure you are listening to every word. If there is some untruth to what is being said, there will often be a loophole in the story. Being able to spot it is the key.
Potential tenants who like to go above and beyond. And, sure, there are overachievers out there in the world, but when someone comes to fill out an application for a rental and they bring you a copy of their credit report, completed background check, pay stubs, and so forth, be sure to do your own homework. There are many ways in which people can alter each of these items. So, unless you pull the credit report or background check yourself, you won’t notice.
A phony supervisor or HR manager. When your potential tenant doesn’t have adequate income, there is a good chance they will have someone step in for them and play the part of their supervisor, boss, or HR manager. These individuals will often lie, stating that the income is much higher than it truly is, assuming the individual even works at the place. A good way to protect yourself is to look up the company and call its main number, rather than the direct numbers provided – ask if the tenant works there and the position of the person given in the reference. Then, if – and when – you speak to this individual, ask lots of questions! The more you converse, the better feel you will get as to whether it is a legit situation.
Keeping yourself protected from a fraudulent tenant means being able to diligently screen each applicant and pay attention to details. Hiring a property manager may also be beneficial in avoiding these scams. Why? Because they are often more in-tune as to the most common scams and have a great amount of experience in seeking out the best tenants on the market.
Marina Shlomov, a managing partner at ALH|Podland Rental Homes Property Management is the author of many articles on Landlording, Property Management, and Real Estate Investing. A residential builder in the state of Georgia since 1999, Marina is an investor herself. Her 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 and LinkedIn.