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how to BEAT RENTAL FRAUD

Thanks to the rising popularity of online rental applications, more and more property managers are noting that there is a corresponding increase in online theft, fraud, and identity theft associated with rental applications. In fact, about one in every two property managers said that they’ve had an increase in online applications this year, and three in every four said that they had concerns about rental fraud. Two in five said they are not presently confident that they even have accurate information about their current residents.

To the greatest extent possible, beating online fraud relies on screening processes that some tenants do not support or enjoy. However, said Mike Doherty, senior vice president at TransUnion Rental Screening Solutions, the key is to do as many things as possible to verify identity and rental history before signing a lease.  “Credit history, prior rental payments, and other screening techniques allow property managers to make smarter and better objective decisions,” he said. He added that property managers must also constantly update and refine their fraud and identity theft protocols to keep up with evolving technology.

Lesson Learned:

Screen tenants as much as  you legally can, even if you have a very open acceptance policy, to make sure that you are renting to whom you believe you are.

Point to Ponder:

How invasive should tenant screening be when it comes to digging into a potential renter’s past?

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About the Author

Carole Ellis is the host of Real Estate Investing Today, a popular 9-minute daily podcast focused on educating real estate investors about the important topics that will make their investing SAFER, FASTER, and MORE PROFITABLE. She's also the editor of the Bryan Ellis Investing Letter. She has more than a decade's worth of experience in and reporting on the real estate industry and, additionally, has written dozens of courses on the topic. Carole lives in Kennesaw with her husband, Bryan, and four children. She believes wholeheartedly that your best investment is always your OWN education.

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(2) comments

Jeff Deleon a couple of years ago

Great article – a few items we screen for while reviewing and considering a potential tenants application are credit, employment, rental, and criminal history. If there is an item identified in criminal history – depending on how far back it dates will be a determining factor of acceptance of their application. I have found that verifying rental history helps to identify any potential issues that may occur, I will also ask for at least (3) check/money order receipts as proof of payment.

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Cynthia Graham a couple of years ago

We are living in times that dictate that you must not take short cuts when screening tenants. Furthermore, dont go after the money because your place has been vacant and the person has a roll of cash in their pocket when they come to look at the
place for rent. I have been screening tenants since the 1980’s and the games people play to get into a unit is just unbelievable. They do what they do with the intention of not paying when they choose not to pay. Screen, screen and screen. Do your homework, so that you are ahead of the lastest trends and criminal minds. Always require state ID’s that match social, check credit, check previous jobs, rental addresses to make sure the info listed on rental application even exists. Take your time and be thorough.

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