Renting an apartment is a time-consuming process for both the tenant and the landlord. Landlords often spend a considerable amount of money marketing the property, engaging a letting agent to help them fill the vacancy and also renovating or updating the property after a previous tenant has moved out.
Before even putting the property on the market again, landlords have even more work to do in order to make it suitable for re-letting. Then, it’s time to put the apartment or flat on the market as soon as possible to avoid losing out on a month of rental income.
That is why avoiding renter scams is hugely important throughout this process. Here are a few to look out for.
Bait and Switch
Tenants looking to cause trouble for a landlord are likely to respond to free online ads because most smaller landlords use this as a cheaper option than paid listings. Small landlords are viewed as easier to scam due to the fact that they do not have as much online security as a major real estate company.
Because smaller landlords have fewer resources, the bait and switch technique is widely used all across the world. Tenants will have someone else lease the place for them — a person who is more qualified financially — and then they will move into the apartment after the lease is signed. Once they’re in, it’s unlikely that you will be able to collect rent from them since they’re not qualified to rent the property in the first place.
If you see applicants continuously bringing random people to viewings, who don’t have a personal connection, beware. This could mean that the applicant is viewing for someone else who might plan on living in the unit. In addition, make sure the applicant lists intended residents on the rental application. While you’re at it, make sure you review policies related to allowing additional occupants living at the unit. This will help keep away unauthorised occupants.
Sympathy
All of us have personal problems that are sometimes out of our control. For example, someone you know might have recently dealt with health issues that ruined their finances and their ability to rent an apartment or flat.
That said, it’s important to beware of tenant scams that include this sympathy angle. Landlords should be aware of applicants who attempt to gain sympathy for tragic issues as a ploy to prevent background checks. Remember; always conduct online background checks. This is hugely important.
Just because a tenant claims to have issues in their personal life does not mean that you should not do your online research, conduct a full background check and ensure the reality of each and every situation. When you’re trying to distinguish an honest applicant from a scammer, use online resources to conduct extensive research.
Employment and Income
The most common lies on an online application in the rental industry are income and employment.
Be sure to verify references, previous residences, talk with prior landlords, require a photo ID, and be very aware of applicants who fail to fill out complete online applications. If lines are left blank, make sure you get that information from the applicant at some point in time before sending out the lease for signing. Take your time to verify employment and income information — you cannot afford to lease your property only to realise shortly thereafter that your tenant is unable to make timely payments each month. This type of fraudulent activity is common, but can be stopped with proper verification and background checks.
Money Transfer Scams
This is an older trick for many tenants, and most property managers are well aware of this issue. But, if you aren’t, remember this scam. Often, when a renter, perhaps from overseas, leases an apartment, they’ll send a cheque soon after to finalise. Renters will send a check for more money than they were supposed to pay and then they’ll ask for a refund.
Once you refund them the extra money, the scam comes into play. Eventually, their initial cheque will bounce — sometimes nearly two weeks later — and you will have lost out on the initial payment and the money you refunded them.
The initial cheque will be deemed fraudulent and the overpayment will be lost. The owner then will have lost money in a short period of time. In order to stop this scam from working, cut down on paper cheques and make sure you use secured online payment portals. These portals will ensure that you get your rent each month and that the accurate amount is paid.
Overall, there are many online and in-person scams that landlords need to be aware of. Other scams might include falsified payslips, illegal sublets to third parties, tenants who have no intention of paying rent and more. But by making sure your property management business is set up in a secure online fashion, you’ll be able to spot the fraudulent activity and tenant scams in no time. You have enough to worry about in terms of home repairs and other landlord duties, so don’t let the scams get in the way of running your letting business.
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