As a rental property owner, you understand how vital it is to protect your property and your income. Unluckily, numerous individuals are falling victim to rental scams, which is making things hard for both renters and landlords. Some scammers are obvious, but others can fool even experienced property owners if they lack a solid tenant screening process in place.
Guess what? You may sleep well knowing your residents are trustworthy, safeguard your investment, and avoid fraud by understanding and implementing smart screening best practices.
Know the Red Flags: Common Fraud Tactics
The fraudsters of rental scams are continually devising new tactics. This is why staying alert and informed is important. One of the most common rental fraud tactics is identity theft, where an applicant uses someone else’s personal information to pass a background check.
Some people might forge pay stubs or bank statements to inflate their income to appear higher than it actually is. Some scammers might even pay the first month’s rent and security deposit with a bad check or stolen funds, only for the payment to bounce later while they’ve already moved in. Another typical problem is renters providing fake references, listing friends or relatives instead of real landlords who could give an honest rental history. These can all make it challenging to know who you are really renting to.
Subletting without permission is another sneaky scam that has been on the rise recently. Besides being a lease violation, allowing unauthorized subletting opens the door to having occupants occupy your property without enough vetting or background checks. In certain situations, renters could even be subletting your property to others with the intent to earn additional income, which places your investment at extreme risk.
And then there are the serious situations, where fraudsters pose as landlords themselves, listing properties that do not actually belong to them and collecting deposits from unsuspecting renters. These scammers have brought headaches for rental property owners everywhere, since it’s now your duty to prove you are trustworthy. If you manage your own properties, this can be somewhat more of a problem.
Recognizing these red flags is not only a smart first step, but it is also a useful tool you can use. By seeing suspicious patterns such as incomplete applications, disinclination to provide ID, or references that can’t be verified, you’re not just identifying a potential scam; you’re preventing it in its tracks.
Tenant Screening Best Practices
Along with knowing typical schemes, employing a strong tenant screening process can help ensure that your applicants are who they claim to be. An effective tenant screening process begins by acquiring a complete application and identification for every adult who will reside in the property. Ensuring that the details match the information surrendered on their application. After that, make sure they can pay the rent by verifying employment and income. It is important to call past landlords to check rental history and look for patterns of late payments, evictions, or other issues. Maintaining consistency is necessary in the tenant screening process. For the sake of fairness and compliance with the law, handle each applicant consistently. Adopting these tenant screening best practices allows you to catch red flags before they become big problems.
Background Check Rental Applicants Thoroughly
For modern rental property owners, a thorough background check is one of the useful tools to protect their property. Several warning signs, such as unpaid debts or a history of late payments, can be checked on credit reports. A criminal background check can also expose offenses that may affect safety in your rental or community. Be sure to utilize a trusted screening service and always seek the applicant’s written permission beforehand. A thorough background check and rental screening provide a clear understanding of who you’re welcoming into your property.
Stay Secure with Landlord Fraud Prevention Policies
Besides tenant screening, staying safe also denotes handling applicants’ personal information securely. One of the best ways to do so is to use an encrypted online portal that renters can use to upload documents. Research for alternative secure online application systems and opt for one that has the ideal reputation for safety.
Lastly, during the application and screening process, it is critical to transparently and clearly communicate your policies on security deposits, rent collection, and lease agreements—and do so in writing. This can help secure both you and your renter in the event of a misinterpretation, possibly saving you from legal trouble and unexpected financial loss.
Sleep Sound Knowing You’ve Screened Smart
It is clear that implementing the proper tenant screening procedures now will save you a lot of trouble sooner or later. By employing tenant screening best practices, executing complete background checks, and verifying identities, you’ll be better equipped to identify scams before they affect your property.
One of the effective methods to thoroughly screen tenants is to work with a professional service. The local specialists at Real Property Management NW Indiana are here to give the support and calmness you desire. Contact us today or call 219-525-1277 to get more data about our property management services in Cedar Lake.
We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.
