Being a landlord is no easy feat. While it sounds nice to rent out a property and make money without much work required of you, it doesn’t always work out this way. If you have great tenants who care about your property and pay their rent on time, being a landlord feels rewarding and worthwhile. However, as any seasoned landlord knows, some potential tenants are predatory. They devise tenant scams that cost you time and money and create more headaches than you thought possible.
However, if you know what to look for, you can avoid these tenant scams and save yourself a world of trouble. What are some of the most common scams you’ll see? Here are the top 5 tenant scams to avoid:
The Cash Upfront
A lovely potential tenant approaches you with everything in order. Forms are signed and to boot; they even offer to pay several months rent on the spot. It sounds great, right? All landlords want payment on time, and it can be refreshing to have a tenant who wants to pay ahead.
But really, it should sound the alarm bells. Although there’s a chance your tenant may genuinely hope to secure an apartment, why are they so eager to pay you ahead of time? Are they getting evicted from their current apartment or living situation? Is their employment situation insecure and they’re not sure where they’ll get their money in a few months? This situation isn’t necessarily a sign that you’re going to get scammed, but you should do some further investigation. Avoid moving too quickly should a potential tenant make an offer like this. Instead, continue with your usual protocol. If everything checks out and you don’t have a bad feeling about it, it may work out. But, you’ll be glad you double checked, as something may turn up when you call references or check their payment history.
The Subletter Scheme
This is an awful scam because both you and your real tenant will get scammed. In this scam, you may move in a new tenant who seemed to check out fine. You’ll get rent on time for the first month or two. By the second or third month, you’ll go to check on the rent and find a different person living on your property! Your original tenant scammed you. Instead of planning to live there, they faked paperwork and then pretended they were the landlord and sublet your property. In most cases, the original tenant charges 6 months rent in advance and then takes off after paying only a month or two to you, the real landlord. So, you end up with a tenant who’s scammed right along with you. In these cases, it’s difficult to move forward as the tenant likely won’t want to pay rent that they’ve already paid, albeit to the wrong landlord.
The Check Bouncer
You can imagine what this scam is. In this scam, rather than paying with a deposit or cash, your tenant writes you a check. Down the line, you discover it bounced, and you discuss it with your tenant. You might think it was an honest mistake. But, this tenant may never have planned to pay you rent in the first place. When this happens and the second check bounces, you’ve wasted time and are now forced to begin the eviction process.
The Fake Document Tenant
Today it’s easy to fake everything from W2s to credit reports. This can allow a tenant to rent from you who isn’t who they say you are. Not only is this a security risk, but these scammers often have no intention of paying rent and will end up wasting your time.
You can avoid this scam by checking out all information carefully. Sometimes, scammers even involve third parties by asking them to act as their employer or landlord. You can quickly discover if this is the case by asking for the wrong person. For example, if on the paperwork it says “David of Oak Apartments,” you can ask for “Daniel at Walnut Apartments.” When confronted with a fake name, they may tell you their real identity.
The Oversized Check or “Employer’s Check”
In this scam, a potential renter will contact you either from another city or overseas. They’ll say they’re moving to your area for work. Then, you’ll get a check that’s well over the expected amount of the deposit or first month’s rent. Typically it’s a bank check or what the tenant will call an “employer’s check.” Then, you’ll get a note from your tenant asking that you wire them back the amount they overpaid. The thing is, the check will never clear, and if you send the amount back, you’ll be out cash.
You can avoid these and other tenant scams by always using a careful screening protocol. Never make exceptions even if your potential client begs and you’re desperate to fill your space. By making sure everything checks out, you’ll save time, money and your sanity in the long run.
Sick of struggling to find quality tenants? A Creative Property Management is your partner in property management services! We’ll market to, screen, and sign on new, great tenants for you. Contact us to discuss your needs today!