Owning a rental property is a great way to earn a stable passive income while also growing your wealth over time. Despite its many benefits, investing in a rental property also comes with certain risks. Things like problematic tenants, property damage, and evictions, can significantly affect the return on your investment. In addition to these, landlords should beware of the rising threat of rental scams.
Scammers can pretend to be you to scam prospective renters or impersonate potential tenants to trick you. Over the years, new forms of rental scams have been created. Unfortunately, they’re not always easy to spot. To help you keep your investment and reputation protected, the experts at Gifford Properties & Management have written this article. Keep reading to discover the most common rental scams and how to avoid them.
Fake Listing Scam
One of the most common rental scams consists of scammers pretending to be you to trick prospective renters out of money. Scammers can steal the pictures and information from your rental listing to create a new, fake ones.
They do this by “renting out your home” to unsuspected victims and ask them for a cash advance to secure the unit, only to never be heard of again. After collecting the money, scammers will stop all contact with the victim. In many cases, this is the point when a tenant realizes they’ve fallen for the scam.
However, if they don’t realize they’ve been scammed, this can have serious consequences for you. They can show up to your property and bother you or your existing tenants. Or they can take to social media to warn others about renting your property, which can significantly affect your reputation as a landlord.
To avoid being a victim of this scam, you can:
- Regularly monitor rental and real estate listing websites and report any fake listings you come across.
- Include watermarks with your contact or business name on all your photos.
- Use your photos to do a reverse image search to find fake listings.
- Create a Google Alert for your property address so you get notified if it's published on any web pages without your consent.
Fake Tenant Application
Landlords use tenant screening to weed out problematic or unsuitable renters. Unfortunately, scammers have found a way around this. They’ll submit an application full of fake information, including falsified pay stubs, credit reports, and employment references. They can also ask other scammers to pose as their references.
By providing fake information and documents in their application, scammers can make you believe they’re reliable and financially stable, when this is far from the truth. Falling for this scam can mean property damage beyond normal wear and tear, theft, late or missed rent payments, and even holdover tenancies.
Luckily, you can spot fake applications with an effective tenant screening process. It’s important that you double-check the information an applicant submits and conduct extensive background, employment, and credit checks to reduce the risk of accepting scammers into your rental.
Fake Checks
Scammers pretending to be interested renters may provide fake checks to “cover” the cost of rent, security deposits, or even move-in fees. However, most landlords realized that the funds on the check are invalid too late. So, they’re left having to get tenants to pay them what they’re owed or even dealing with holdover tenants and evictions.
To avoid falling for this rental scam, you must know how to spot fake checks. You can ensure a check’s validity by:
- Ensuring it comes from a legitimate institution.
- Paying close attention to security features such as watermarks, security threads, or color-changing ink.
- Ensuring the mailing address and name on the check match with your renter’s current address and full name.
- Touching it to ensure it hasn’t been printed on flimsy material.
Subletting Scam
Allowing tenants to sublet your rental property can be extremely dangerous if not done correctly. To avoid problems altogether, most landlords prefer not to allow subletting of any kind. However, some tenants might ignore this and sublet the property without their landlord’s knowledge or approval.
Whether they’re doing it to make some easy money or simply because they don’t want to go through the hoops of breaking the lease early, this can lead to property damage, theft, and even legal disputes for the homeowner.
Conducting regular property inspections can help you ensure your rental is not being sublet without your knowledge. To avoid subletting scams altogether, you must outline your subletting policies on the lease. In some cases, this means stating clearly that you don’t approve of subletting of any kind.
Tenant Eviction Scam
Effectively evicting a tenant can be a lengthy and annoying process. It can become even more challenging if tenants frequently try to reset it. For instance, a tenant whose been evicted for nonpayment of rent can make a late or partial payment of a significantly smaller amount than they owe. If you as their landlord accept this, it can reset the eviction clock.
Having a tenant reset the eviction process can not only make you lose time and money but also leave your property at higher risk of property damage and holdover tenancies. The best way to avoid this is to work with a legal consultant or property management company. These professionals can guide you through the entire eviction process and help you evict tenants in a timely manner.
Bottom Line
Landlords should beware of rental scams. Frauds such as subletting scams, fake checks, fake rental listings, and eviction scams can cause you significant losses, property damage, and even legal disputes. Now, that you know how the most common rental scams work, you’re better prepared to keep your investment protected.
Need help keeping your rental property protected? Contact Gifford Properties & Management today! With our high-quality tenant screening process, we ensure that only the best, most reliable renters are placed on your property. This not only helps us avoid rental scams but also reduces the risk of evictions significantly.
