Beware of These Four Renter Scams
These four recognizable resident scams are a reminder of how critical it is to properly screen prospective residents. Appfolio reports on these potential incidents and how to avoid them.
1. Residents who have no intention of paying their rent.
Renters who consistently are unable to pay their rent on time are an obvious problem. Maybe they have a legitimate explanation, such as high medical bills or loss of a job… but such renters anticipate that the community will take a few months to catch on to the fact that they’re not paying and plan to live rent-free until you evict them. Property managers who simply ask renters to supply a credit score or who complete their own quick background checks on renters are more likely to fall victim to this scam.
2. Money Wiring Scams
Veteran community managers are aware of this old trick: property managers receive a rental application from overseas. If the renter is accepted, the resident quickly sends a certified check. However, they send more money than they need to and then request that the overpayment be wired back as soon as possible. The initial certified check provided is fraudulent, but will often take weeks to bounce. In the meantime, property managers face the risk of losing the money they’ve wired overseas.
3. Falsified Pay Stubs Scam
When asking for proof of employment, if a prospective renter shows pay stubs, make sure they are not forged. Prospective residents can purchase fake pay stubs online, then pawn them off on an unsuspecting owner as proof of employment. The renter may be unemployed or underemployed, and not have the means to pay the full rent. If you request pay stubs, also ask for employment references and call them to confirm validity.
4. Illegal Sublets to Third Parties
This negatively affects both property managers and innocent third parties, who find themselves victims of a hustler. In this scam, someone rents your apartments, pays rent for the first couple of months, and then fails to pay. When stopping by the apartment to inquire about the late rent, the property manager finds a different person living there who has paid 6 months’ rent for a short-term sublet to the original lessee. By the time you both figure out what has happened, the original grifter is long gone with the money needed to finance their next scam.