Few things are more distressing for a property manager than finding out that they've been the victim of a tenant scam. From fake documentation to wire fraud, squatting scams, and more, scammers are becoming more creative and brazen, so it's important to know the tell-tale signs you're dealing with a scam and how to avoid them.
In this blog post, we'll explore five of the most important things you can do to protect yourself from a rental scam.
In today's digital world, it's virtually impossible for one to remain completely hidden from the renderings of a Google search. And, if they are, that could potentially be a red flag. (But not always.) Running a quick search of prospective tenant's name and email address could provide you a basic look at who they are via their social or professional accounts and cancel out any immediate red flags.
A Google search is a good start, but a thorough background check is still essential. One of the most common scams is providing false documentation like IDs, passports, credit reports, check stubs, and employment letters. A background and credit check will help confirm the legitimacy of documents provided in person and also reveal if the potential tenant has any criminal history.
But remember, there have been recent changes to the laws surrounding what property owners are allowed to look into with tenant screenings, so be sure to check the laws that apply in your specific state. When partnering with TheGuarantors, you can get peace of mind knowing that potential tenants are being put through the strong, thorough screening services that we provide.
As a continuation of the background screening process, you can ask prospective tenants to provide references and a reference letter. However, as a property manager, you should be aware of rental reference scams. To ensure that the reference provided is legitimate, one thing you can do is verify the name on the tax record of the home to see if the name you've been given is actually the owner.
As mentioned before, scammers can easily falsify documents. This also includes income verification documents like tax returns, bank statements, and pay stubs, so pay close attention to ensure these documents have not been forged. If a prospective tenant’s income can't be verified by the above means, or you're still having doubts about a tenant's ability to pay, you can offer a product like TheGuarantors’ Lease Guarantee. This allows renters to qualify for the apartments they want while giving you the peace of mind and protection you need by ensuring you're covered in the event of renter default.
Many scams these days involve wire fraud or bad checks. In these types of scams, tenant may overpay the security deposit using a bad check, then later ask for a refund for the overpayment via wire transfer. So, make sure to never accept overpayments, and whenever possible, only deal with bank and online transfers. Online transfers are completely traceable, and your bank can help you verify legitimate accounts.
When it comes to underpayments, however, it's really up to you. There's no denying that high move-in costs can be a difficult barrier for a qualified tenant in securing the apartment of their dreams. As an alternative, you could offer your applicant TheGuarantors’ Security Deposit Replacement, which helps tenants lower move-in costs and ensures you stay covered from damages.
As inflation continues and the rental market becomes more competitive, rental scams may become more common. With a range of products, TheGuarantors can help provide you with the additional protection you need to help protect you and your portfolio.
Get in touch today to learn more.