How To Avoid Applicant Scams

By
Real Estate Technology with Rentec Direct

Today I was talking to a current customer who uses our property management software to manage the various rentals she owns.  One of her homes became vacant and she was reporting the great success she had using our simple built-in advertising & application features to generate traffic for this vacant home.

In our conversation, I mentioned that we provide our customers access to tenant screening reports - such as credit and criminal background - and it was very easy to pull instant reports from her program.  Unlike some areas in the country, this landlord is in an area where rentals are in high-demand and she has over 20 applicants per rental.  She told me "Oh, we live in an area where applicants just bring in their own credit report so I don't have to run it."  This shocked me!  Really, allowing a stranger to qualify to rent your lovely high-demand home based on a document that you have no idea of its authentic data?!?!  When I mentioned to her, gently, that this is really not servicing her interests, and she was putting herself at risk, she was just as shocked.  She hadn't even considered that people who would pay very high rent would possibly falsify a document.  Wow!  

SAMPLE CREDIT REPORT

 

I shared a few stories of when I was in property management and had applicants bring me "copies" of their credit report.  I would hear things like "I don't want my credit score affected by you pulling credit" or "I just pulled it for free and I don't want to pay for it" or "another landlord just pulled it and here is a copy..."  Nine times out of 10, these people were providing me bogus information.  Even if it was a true credit report, the data is only good for 30 days.  And this doesn't even touch on the information found in criminal reports!  If you've ever run one, and found horror stories, you'll understand what I mean.  The point of running credit and criminal reports is to provide the owner/manager with a way to gage the security of a particular tenant taking over his THOUSANDS AND THOUSANDS OF DOLLARS investment.  If an applicant refused to let me pull background reports, I denied their application immediately. I gently suggested she consider adopting a similar policy to protect her assets.  

In my experience, a crucial key to protecting your interest in a property is establishing a criteria for residency and using reliable vendors and standardized questions to verify if your applicant will be a quality renter.  If you deviate, you are putting your interests at risk.  Most professional property managers understand this, and thankfully, they are providing property owners with greater protection.  And it’s not expensive or time consuming to offer this basic protection!  




Here are some helpful resources to consider for establishing your criteria and policies:

SAMPLE CRITERIA

Advice from the National Multi Housing Council

 

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Topic:
Real Estate Technology & Tools
Location:
Florida Lee County Fort Myers Beach
Groups:
Investment Property (USA)
Realtors®
Active Rain Newbies
Tech Corner
Property Management
Tags:
criminal
credit
property management
applications
tenant screening

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Ambassador
2,473,072
Patricia Kennedy
Evers & Company Real Estate, Inc. - Washington, DC
For Your Home in the Capital

Janet, checking the eviction records is a really good idea.  It's hard to find landlord abuse on a normal credit report or criminal check.

Jul 17, 2012 03:33 PM #1
Rainmaker
79,712
Janell Kittleson
Rentec Direct - Grants Pass, OR
Property Management Software & Tenant Screening

You're absolutely right, Patricia!  We offer a report for doing just that and I encourage all landlords and managers to pull it.  A small investment at first can save a lot of time and money down the road.

Jul 17, 2012 03:41 PM #2
Rainmaker
1,010,319
Adrian Willanger
206 909-7536 TheHomeFunnel.com - Seattle, WA
Profit from my two decades of experience

Janell, as a landlord I think this service is well worth the fees it charges. Good post.

 

thanks,

Jul 17, 2012 03:53 PM #3
Rainer
204,570
Mark Delgado
houses for rent, Solano County & Glen Cove - Benicia, CA
Benicia and Vallejo, Property Management, rental h
In order to ease our enforcement of consistently applied qualifying guidelines, having the same format of credit report every time with the same information is critical.
Jul 18, 2012 04:34 AM #4
Rainmaker
79,712
Janell Kittleson
Rentec Direct - Grants Pass, OR
Property Management Software & Tenant Screening

Adrian - I think so too.  As a PM, I was always concerned about keeping an owner happy with a quality renter in his/her property but as a Landlord, I was plain worried about what the wrong person could do to my pocketbook.  Mark - good work!!  A quality PM is worth his weight in gold!

Jul 18, 2012 09:36 AM #5
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Rainmaker
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Janell Kittleson

Property Management Software & Tenant Screening
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