{"id":2465,"date":"2022-04-26T19:09:58","date_gmt":"2022-04-26T19:09:58","guid":{"rendered":"https:\/\/imsfund.com\/?p=2465"},"modified":"2022-04-26T19:09:58","modified_gmt":"2022-04-26T19:09:58","slug":"how-landlords-can-spot-and-avoid-them","status":"publish","type":"post","link":"https:\/\/imsfund.com\/index.php\/2022\/04\/26\/how-landlords-can-spot-and-avoid-them\/","title":{"rendered":"How Landlords Can Spot and Avoid Them"},"content":{"rendered":"<p> <br \/>\n<\/p>\n<div :class=\"{ 'hidden': $store.gatedContent.showFullPrompt() || $store.proContent.showFullPrompt() }\">\n<p><span data-preserver-spaces=\"true\">Landlords have had to deal with fake tenant applications for years. But <a href=\"https:\/\/www.usa.gov\/housing-scams\" target=\"_blank\" rel=\"noopener\">rental scam<\/a> artists upped their game and have gotten increasingly sly in their attempts to evade background checks for rental properties.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">How can you protect yourself and your investment from these con artists? We wanted to share what to watch out for and how to look for discrepancies in applications.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Below, you\u2019ll learn what landlords need to know about the rising number of rental scams.<\/span><\/p>\n<h2>How can you protect your investment from rental scams?<\/h2>\n<p><span data-preserver-spaces=\"true\">Rental scams can leave a real estate investor out of thousands of dollars in lost rent or property damages. The best line of defense? Landlords need to vet their tenants properly. Seriously, find out as much as you can about the type of person you\u2019re entrusting to live in your investment.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">For example, my property management company has put several checks in place to <a href=\"https:\/\/www.biggerpockets.com\/blog\/2015-08-15-10-ways-thoroughly-screen-tenants\" target=\"_blank\" rel=\"noopener\">screen applicants<\/a>. We\u2019ve created a screening matrix to score applicants on factors like credit, income, past rental history, and past due balances.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">With years of experience, our team created this matrix as a scoring system to assess risk. Applicants receive a \u201cscore\u201d between 0.00 to 6.25 or higher (the lower, the better):<\/span><\/p>\n<ul>\n<li><span data-preserver-spaces=\"true\">0.00 \u2013 3.50 Low Risk (Security Deposit = 1-month rent or 1-month surety bond)<\/span><\/li>\n<li><span data-preserver-spaces=\"true\">3.75 \u2013 5.00 Average Risk (Security Deposit = 1-month rent or 2-month surety bond)<\/span><\/li>\n<li><span data-preserver-spaces=\"true\">5.25 \u2013 6.00 Higher Risk (Security Deposit = 3-month rent or 3-month surety bond)<\/span><\/li>\n<li><span data-preserver-spaces=\"true\">6.25 + Denied or co-signer required<\/span><\/li>\n<\/ul>\n<p><span data-preserver-spaces=\"true\">This matrix gives us a quick objective way to review applicants, but as you\u2019ll see below, it\u2019s by no means foolproof. So you\u2019ll need to get your private investigator hat and magnifying glass out.<\/span><\/p>\n<h2>Who commits fraud and why?<\/h2>\n<p><span data-preserver-spaces=\"true\">The reasons for committing fraud vary as much as the people committing the crime. Some can\u2019t afford the rent, some have no intention of paying rent, and others want to hide previous financial transgressions.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Today, nearly everyone can alter copies of \u201cofficial documents\u201d with their phones. Sometimes, you have to dig deeper to uncover the scam.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Don\u2019t get me wrong; we don\u2019t always assume everyone\u2019s out to pull one over on our clients. But if someone has nothing to hide, they shouldn\u2019t get defensive when you start asking questions.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">By the way, if someone does get defensive, take that as a red flag and consider denying their application.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">But if the numbers don\u2019t add up, addresses don\u2019t check out, or social media profiles suggest someone very different, ask why.\u00a0<\/span><\/p>\n<h2>Detecting fraudulent pay stubs<\/h2>\n<p><span data-preserver-spaces=\"true\">Again, most applicants are honest potential tenants who want to rent your property and pay rent appropriately. However, those few bad apples mean you have to keep your guard up.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">When an applicant submits their proof of income, especially pay stubs, pay close attention to the deductions and watermarks. Look to see if check numbers match pay stubs, too.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Here\u2019s a recent example of a fraudulent pay stub my company received (names have been altered for privacy):\u00a0<\/span><\/p>\n<p><picture class=\"alignnone wp-image-142820 sp-no-webp\" title=\"Rental Scams: How Landlords Can Spot and Avoid Them 2\"><source srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/04\/rental-fraud-calc.webp 512w,https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/04\/rental-fraud-calc-300x163.webp 300w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" type=\"image\/webp\"><source srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/04\/rental-fraud-calc.png 512w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/04\/rental-fraud-calc-300x163.png 300w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" type=\"image\/png\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/04\/rental-fraud-calc.png\" class=\"alignnone wp-image-142820 sp-no-webp\" title=\"Rental Scams: How Landlords Can Spot and Avoid Them 2\" alt=\"rental scams calculation\" height=\"558\" width=\"1024\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/04\/rental-fraud-calc.png 512w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/04\/rental-fraud-calc-300x163.png 300w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\"\/><\/source><\/source><\/picture><\/p>\n<p><picture class=\"alignnone wp-image-142819 sp-no-webp\" title=\"Rental Scams: How Landlords Can Spot and Avoid Them 3\"><source srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/04\/rental-fraud-earnings.webp 512w,https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/04\/rental-fraud-earnings-300x93.webp 300w\" sizes=\"(max-width: 1043px) 100vw, 1043px\" type=\"image\/webp\"><source srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/04\/rental-fraud-earnings.png 512w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/04\/rental-fraud-earnings-300x93.png 300w\" sizes=\"(max-width: 1043px) 100vw, 1043px\" type=\"image\/png\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/04\/rental-fraud-earnings.png\" class=\"alignnone wp-image-142819 sp-no-webp\" title=\"Rental Scams: How Landlords Can Spot and Avoid Them 3\" alt=\"rental scams earnings\" height=\"324\" width=\"1043\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/04\/rental-fraud-earnings.png 512w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/04\/rental-fraud-earnings-300x93.png 300w\" sizes=\"auto, (max-width: 1043px) 100vw, 1043px\"\/><\/source><\/source><\/picture><\/p>\n<p><span data-preserver-spaces=\"true\">You\u2019ll see that the deductions on the paystub didn\u2019t add up correctly. Also, if you look closely on the right side of the check, it says \u201cADP\u201d. However, there is no ADP logo at the top of the paystub. Most ADP checks show the logo.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Does that make your Spidey Sense tingle? It should! Time to get out that magnifying glass, better known as Google, to learn more about the applicant\u2019s employer.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">If a quick search doesn\u2019t turn up the supposed employer or if an elderly person answers the \u201cbusiness\u201d phone confused about why you\u2019re calling, get suspicious. Sometimes when you ask for additional documentation like a W-2, the scammer knows you\u2019re onto them, and they vanish. Consider yourself lucky for having dodged a bullet.<\/span><\/p>\n<h2>Identifying fraudulent documentation<\/h2>\n<p><span data-preserver-spaces=\"true\">Even when someone submits documentation with tax IDs or supervisor information, I recommend you confirm everything. We\u2019ll see applicants claiming to have worked for a place for five years. We discovered that the \u201ccompany\u201d only filed for an LLC four months ago upon further research. Hmmm, something doesn\u2019t add up.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Things can get weird when a fraudulent application gets submitted on behalf of a totally different person. Use court records to verify a lot of information that\u2019s submitted. These records can provide tons of info (from traffic tickets to divorce proceedings to address discrepancies).<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Credit checks can unearth curiosities like mortgages in other towns or signatures on deeds that don\u2019t match application signatures. Again, live by the motto: trust but verify.\u00a0\u00a0<\/span><\/p>\n<h2>Closing thoughts<\/h2>\n<p><span data-preserver-spaces=\"true\">None of these discoveries makes my team super-sleuths (although they are pretty awesome). I wanted to demonstrate the time and effort we put into making sure we approve the right people and avoid rental scams.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">A good review process makes everyone\u2019s job much easier. Matrix scores only show part of the story. They help weed out the easy denials, but you have to use your intuition to unearth these scammers.\u00a0<\/span><\/p>\n<\/div>\n<p><br \/>\n<br \/><a href=\"https:\/\/www.biggerpockets.com\/blog\/rental-scams-landlords-can-avoid\">Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Landlords have had to deal with fake tenant applications for years. But rental scam artists upped their game and have gotten increasingly sly in their attempts to evade background checks for rental properties.\u00a0 How can you protect yourself and your investment from these con artists? We wanted to share what to watch out for and [&hellip;]<\/p>\n","protected":false},"author":5,"featured_media":2466,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"fifu_image_url":"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/04\/rental-scams-1024x680.jpg","fifu_image_alt":"","footnotes":""},"categories":[9],"tags":[],"class_list":["post-2465","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog"],"_links":{"self":[{"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/posts\/2465","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/comments?post=2465"}],"version-history":[{"count":0,"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/posts\/2465\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/media\/2466"}],"wp:attachment":[{"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/media?parent=2465"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/categories?post=2465"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/tags?post=2465"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}