Key Takeaways
- Watch Out for Overpayment Scams:
If a tenant sends a check for more than the required amount and asks for a refund, it’s likely a fake check scam. Always wait for checks to fully clear and never refund overpayments. - Verify Application Details Thoroughly:
Fake pay stubs, credit reports, and references are common. Use trusted tenant screening tools, and double-check all employment and rental history information. - Monitor for Stolen Listings:
Scammers can repost your rental ad pretending to be the landlord. Regularly search for your listings online and report any duplicates to protect your reputation. - Confirm Credentials of Agents and Property Managers:
Always verify licenses and contact details before working with real estate professionals. Be cautious of unsolicited offers and high-pressure tactics.
Many investors prefer to invest in real estate over the stock market or crypto for its stability, predictable profits, and the ability to liquidate assets at any time.
Moreover, by investing in a rental property, they can enjoy a steady passive income while knowing that they’re wealth and equity are also growing over time. However, like any other type of investment, rental properties come with some risks.
Problematic tenants, costly repairs, long periods of vacancy, break-ins, and compliance issues are some of the most common challenges landlords face. But that’s not all! Over the past decade, landlords have also become an easy target for scammers.
Falling for a rental scam can cost you thousands of dollars, whether it’s a fake check scam or a scammer posing as a real estate agent to steal your information.
If you want to protect your investment, you need to understand how scammers operate. Luckily for you, the team at Real PM Prestige has compiled a list of the most common rental scams landlords fall for and how to avoid them!
Fake Check Scam
The fake check scam is one of the oldest tricks in the book. However, hundreds of people still fall for it. As you can guess by the name, this fraud consists of scammers paying with a fake check.
Alternatively, scammers use fake checks to get money from landlords. They’ll pose as interested tenants and go through the entire leasing process.
When it’s time to pay the first month of rent and deposit, they’ll send a check with a much larger amount. They will then ask the landlord to refund the excess amount. Unsuspecting landlords will send over the money only to never hear from the scammers again.
To avoid falling for this scam, you should learn how to spot fake checks. If you’re ever unsure about a check given to you by a tenant, take it to your bank to have it inspected.
Additionally, never move along with the leasing process before the check clears. And if a tenant ever overpays you, return the check immediately. If it was an honest mistake, they won’t have a problem writing you a new check with the correct amount.
Fake Information on Rental Application
No landlord wants to deal with problematic tenants. That’s why tenant screening is so important. Unfortunately, scammers have found a way to trick their way through the screening process, even to live in the property themselves or to help unsuitable renters find a place to live.
Scammers have learned how to counterfeit pay stubs, tax returns, credit reports, and government-issued IDs.
Additionally, they work with other scammers who pose as employers or former landlords to fake good references. So, you have to be extremely careful during the screening process. Double-check all the information you see on the application and run extensive background and credit checks.
Stolen Listing Scam
Posting your rental listing online is a simple way to reach a wider audience and find great tenants with minimal effort. Unfortunately, it leaves you vulnerable to fraud.
Scammers often steal rental listings and re-publish them, posing as the landlord. They’ll trick unsuspecting tenants, making them pay in advance for renting the property and then ghosting them.
This scam may not affect you directly, but it can negatively impact your reputation. Angry victims may come knocking on your door, disturbing real tenants.
Additionally, they can take to social media to warn others about renting your property, making it harder to attract new renters.
To avoid this, you should delete all your inactive listings. You should regularly monitor real estate websites or use tools like Google reverse image search to find and report fake listings of your rental.
Fake Service Animals
As a landlord, you can choose whether pets are allowed on your property, except for certified service animals.
Per the Fair Housing Act, you are required to provide reasonable accommodation to tenants with disabilities, which includes allowing service animals on the property with no extra cost.
The best way to avoid falling for this fraud is by requesting official documentation and double-checking it to ensure it’s real.
Scammers Posing As Real Estate Agents or Property Managers
Scammers have taken to posing as real estate agents and property managers. They’ll offer their “services” to unsuspecting landlords with the end goal of getting money or access to sensitive data, such as property details, bank account information, or financial statements.
Scammers often use fake websites, professional-looking email accounts, and fake licenses. Before you start working with any professional, make sure to verify their information.
Check the license with your state’s regulatory board or local real estate association, confirm contact information using official sources, and never share sensitive details without verification. Be cautious of professionals who request unusually high fees, avoid in-person meetings, or pressure you to act promptly.
Bottom Line
Whether you’re a new or seasoned landlord, you should be wary of the rental scam. This growing threat can result in huge financial losses, identity theft, long-drawn-out evictions, and serious property damage.
Moreover, scammers can impersonate tenants or real estate agents, which can lead to legal complications.
If you need help protecting your Texas rental, contact Real PM Prestige! Our team of licensed property managers can help you with anything from screening potential tenants and pets to regularly browsing rental websites to spot fake listings using your pictures of your property.
We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.
