Key Takeaways:
-
Overpayment Scam: Scammers may send an overpayment, claiming it was a mistake, and request a refund. Always wait for checks to clear before proceeding.
-
Fake Tenant Information: Verify tenant details such as employment and rental history to avoid fraudulent applications.
-
Illegal Subletting: Conduct property inspections to ensure tenants aren’t subletting without permission.
-
Stolen Listings: Regularly monitor rental websites and use reverse image searches to protect your listing from being stolen by scammers.
Owning a rental property can be incredibly profitable. Unfortunately, being a landlord comes with some risks, including property damage, problematic tenants, unpaid rent, legal disputes, long vacancies, high tenant turnover, liability issues, and rising property taxes.
On top of this, landlords have become an easy target for scammers. One way to mitigate these risks is to find great tenants for your property, which can help ensure steady rental income and a smoother overall experience.
Rental scams have become more and more common over the past decades. Scammers have developed numerous tactics to deceive both property owners and tenants, from stealing landlords’ listings to trick tenants out of their money to faking employment records or rental histories to pass tenant screenings. Learning how to recognize common rental scams will help you protect your investment.
In this article, the team at T-Square Properties will go over the most common rental scams that affect landlords. Keep reading to learn, not only how to recognize rental scams, but also how to avoid them.
Tenants “Accidentally” Overpaying
Scammers often pose as tenants, going through the entire leasing process. Once their rental application is accepted, they send a check that exceeds the agreed amount for rent, deposit, and move-in fees.
Claiming it was a mistake, they ask the landlord to refund the excess. In reality, the check is typically fraudulent or empty, leaving the landlord to cover the refund with their own money.
By the time the check bounces, the scammers are gone, leaving the landlord with an empty unit and a financial loss. To avoid falling for this scam, always return overpaid checks immediately and wait for the check to clear before proceeding with the lease agreement.
Tenants Filling Their Application with Fake Information
Screening tenants thoroughly is one of the easiest ways to avoid leasing your property to problematic renters. Unfortunately, scammers have found ways to go around this.
Tenants who know they’re not the ideal fit for a property have resorted to providing fake information on their rental applications to ensure they’re selected over other, more qualified renters. This goes from falsifying employment information, such as fake job titles, inflated salaries, or fictitious employers, to creating fake credit reports or asking a friend to pose as former tenants to get good references.
The good news is that this scam can be easily avoided by double-checking all the information potential tenants provide in their applications. By verifying that the employers listed exist and calling them to ask about potential tenants, you’ll be able to avoid renting to tenants who’ve provided false information. Additionally, by running independent credit, background, and rental history checks, you’ll be able to ensure you only rent to suitable tenants.
Tenants Illegally Subletting Your Rental
Subletting is not for every landlord. Luckily, you’re in your right to prohibit subletting. The issue is that some tenants illegally sublet their units, tricking both their landlords and unsuspecting renters.
Scammers rent a unit the old-fashioned way. Then, they list out the unit at a higher rate, posing as the owner. This is a problem for the landlord, as they have no idea that their rental is being sublet, making it more vulnerable to property damage, unpaid rent, and holdover tenancies. It’s also an issue for the new “tenants”, as they’re illegally renting the property and don’t have any of the protections real tenants have.
Luckily, you can prevent the subletting scam by conducting regular property inspections. Seeing the property in person will help you determine whether any non-approved tenants are living in it. Additionally, your lease should clearly outline your stance on subleasing. If subletting is not allowed and tenants do it, you’ll have legal grounds to prosecute them.
Scammers Stealing Your Listing
Nowadays, there are tons of rental websites where you can post your listing to increase its visibility and fill your vacancies quickly. Unfortunately, this has made it easier for scammers to steal real listings and repost them with their contact details, tricking unsuspecting renters into paying security deposits for properties they don’t own or aren’t really for rent.
This scam doesn’t only affect renters, but can cause many issues for you, the actual owner of the property. The victims may show up to your property, looking to see the unit they’ve leased. This can be annoying for existing tenants. Additionally, upon realizing they’ve been scammed, victims can take to social media to warn other people. If you’re actively advertising your property, this can make it incredibly difficult to fill your vacancies.
If you want to prevent this scam, you should regularly monitor rental websites and report any listings that use your photos or information about your property without authorization. You can also use Google’s reverse image search to make it easier to find fake listings.
Squatters Faking a Lease
Squatters are every landlord’s worst nightmare, as they can be incredibly difficult to deal with. Unfortunately, as many states have implemented laws to protect landlords from squatting, scammers have found new ways to illegally occupy properties.
Some squatters now use fraudulent documents to claim they’ve been legally living on a property. Some do so by forging lease agreements or posing as legitimate tenants without ever intending to pay rent. Others move in under false pretenses and take advantage of tenant protection laws to delay the eviction process, sometimes staying rent-free for months.
You can avoid falling for these scams by regularly inspecting the property to identify and deal with unauthorized occupants early and conducting thorough tenant screening to ensure applicants are legitimate. Additionally, it’s important to act quickly in case of nonpayment of rent. By addressing missed rent payments immediately, you’ll prevent prolonged occupancy disputes.
Bottom Line
Landlords should beware of rental scams, as they can lead to financial losses, property damage, and lengthy legal battles. Understanding common scams and knowing how to identify them is essential for keeping your investment protected. By conducting thorough tenant screenings, regularly inspecting your property, and acting quickly on red flags, you can protect your investments.
If you want to protect your rental property from rental scams and unsuitable tenants, let the team at T-Square Properties help you! Contact us today to learn what we can do for you.
Disclaimer: This blog article is for informational purposes. The information contained in this blog article may not be the official policies of T-Square Properties.