Being a landlord is hard work. The day-to-day, endless tasks of calling, scheduling and setting reminders for everything from rent to home warranty companies. Once you finally check off the last thing on your to-do list, the month starts all over. It’s hard enough to look after the tenants you currently have, not to mention others. Technology has made being a landlord easier, but not for everyone. Helping the rental market cut down on fraud requires landlords to take a proactive stance.
The rental market is roaring along as many people are staying renters rather than becoming homeowners. According to the U.S. Census Bureau, in 2016, the U.S. homeownership rate dropped to a low not seen since the 1960s, Bloomberg reported (subscription required). At 64.2% today, renting is just the new normal for many. With a high demand for rentals, it’s becoming increasingly difficult to find a new place to live.
In markets where rentals are scarce, tenants often add additional information to their applications, and essays are becoming more common as they try to set themselves apart from the competition. In Austin, Texas, I received an application which included an essay explaining why the adult couple and their three kids would be amazing tenants. And in San Francisco, I’ve learned that many landlords are demanding tenants pay an application fee, full deposit and first month’s rent before even being considered for the rental.
Tenants are feeling pushed to do things outside the typical rental application. In markets like these, landlords need to be extra diligent in helping lower fraud for tenants. Scam artists are taking advantage of the current high demand for rentals and giving the rental market a bad name.
Take Joseph as a prime example of a tenant who has fallen victim to fraud. While looking for a place to live on Craigslist, he found a landlord who had a great two-bedroom townhouse for $1,800 per month. Given that market rent in this area is $2,900, Joseph immediately responded and did just as the landlord requested. He mailed him a cashier’s check of $2,500, which included a deposit and application fee. He then scheduled to see the rental for a day the following week. The landlord never showed.
Tenants and property managers alike should be taking the following steps to keep the rental market free of such fraudulent activity.
Be Proactive
Today’s landlords and property managers live in a technological world. If you are not doing all that you can to verify yourself as an honest owner and property manager, then shame on you. Every listing site now allows you to verify yourself, which helps tenants know they are not getting scammed. Take the time to prove you are you and that you have the authority to rent the home that’s listed.
Tenants who are looking for listings need to be more diligent and look for such verifications so they aren’t being taken advantage of and preyed upon.
Protect Your Information
Anyone in property management knows that a person’s information is very important, so they should never ask you to provide information like your Social Security number over the phone or in person. It should always be with a rental application via a reputable service. They also won’t ask for cashier’s checks mailed to them in advance, for gift cards purchased with a photo sent to them, or for cash-only deposits.
Money isn’t the only thing scammers are after, so be careful with your rental application information. Don’t ever fill out a paper application or send information in an open email. Property managers and landlords can utilize encrypted online application and background services, which work to protect such sensitive information. Look at the website browser name to ensure it is with one of those reputable companies.
Is It Too Good To Be True?
If it seems too good to be true, then it probably is. Finding amazing rentals at under-market rates is most likely fraud. Do your part and report the fraud to the company where you found the listing.
Landlords and property managers who are not proactive in helping tenants apply to honest listings are creating a way for fraud and theft to survive in the rental industry. We all need to do our part in cutting down on listing and application fraud.