Tenants are our biggest asset when owning rental properties. Rental payments is where our income for the property is derived. There is no bottom line without the rental income, thus good tenants are integral.
Having a solid tenant screening process is important, but we also want to make sure that the application we are reviewing is legit in the first place.
Now, if you have property management screening tenants for you then these are some things they should be doing already. For those self managing let’s discuss a few points in particular as we can be a more desirable target for the fraudsters.
Tips to Weed Out Fraudulent Rental Applications
The standard of running credit reports and receiving employment and rental history should be assumed. We are talking the other nuisances to be sure that the person applying is actual who they say they are.
I know, it seems crazy but in 2018 roughly eighty percent of property management companies said they dealt with tenant fraud, according to a study conducted by forrester consulting for the TransUnion Credit Bureau.
Don’t let that scare you though, property management companies see thousands of applications each year and it’s a tiny percentage of them that are an issue.
Identification at a Showing
Most people using fake identities and names prefer to submit online applications and have as little to no physical interaction with the landlord before getting into the unit.
Having a practice of only giving applications to those that view the property gives less incentive to fraudsters to pursue that location and gives you the opportunity to check their driver’s license to see it matches.
Yes, someone could have a fake ID, but that is next level stuff as opposed to the majority of tenant fraudsters who aim to just slip through the screening process and get into a property.
Background and credit checks
When requiring background and credit checks put the onus on the applicant to provide it. There are several services that offer this for a reasonable price, such as SmartMove from TransUnion.
Get the report from them and if something doesn’t feel like it adds up you can run one yourself with the social security number provided to verify it matches the information and history you were provided with.
Everyone has a cellphone number now and I can just as easily have a friend pretend to be a boss. This is why I prefer to call the main number of a company and ask for the person listed or someone in human resources as opposed to the number provided by the applicant.
Doing it this way guarantees I’m speaking to someone at that company and will find out if they actually work there or not.
Be Smart not Paranoid
Some of these actions can be used as best practices and some for when your gut is feeling like something just isn’t right. Always be sure to follow all federal and local housing laws, regardless.
In the end, running into a fraudulent applicant is the exception not the norm, let’s hope you never have the experience. A good screening process can put those odds well in your favor.