It’s each landlord’s worst nightmare: being scammed by their tenant. As if there weren’t sufficient scams round, ripping off landlords is turning into more and more well-liked. Whether or not it’s seeing your rental condo listed on-line by another person or receiving pretend employment and monetary paperwork, coping with con artists is likely one of the explanation why many traders resolve that being a landlord is extra bother than it’s value.
In accordance with HousingWire, 93% of landlords have found fraudulent tenant paperwork, and 84% have uncovered false revenue or employment claims. Fraud detection and revenue verification software program Snappt reported that 6.4% of rental purposes have been fraudulent in 2024—scams have gotten more and more refined.
Snappt and rentprep.com have listed a number of the most typical scams landlords want to concentrate on. Nevertheless, HousingWire studies that scammers are evading fraud detection software program through the use of solid pay stubs, altered credit score studies, and pretend employment letters. Mother-and-pop landlords who personal single-family properties and don’t have the monetary sources of bigger condo buildings are more and more within the scammers’ crosshairs.
Profession Scammers
One of the crucial egregious latest scams concerned Russell and Linda Callahan, who have been indicted for orchestrating a rental rip-off that stretched out for 20 years in Worcester County, Massachusetts. Amongst their checklist of fraudulent actions have been bouncing safety deposit checks, mendacity on purposes, and defrauding landlords out of over $100,000.
Pretend Landlords
Being a pretend landlord is one other well-liked rip-off method, the place listings are posted on social media, and potential tenants hand over hundreds of {dollars} with no authorized proper to be within the property.
Typically, on-line rental websites like Zillow, Realtor.com, and Residences.com have extra sturdy fraud safety software program in place, with inquiries directed to actual property brokers, however social media websites like Fb Market and Craigslist are the wild west in the case of pretend listings, as a result of it’s the place smaller landlords are inclined to put up, making them simply searchable and in a position to be defrauded.
Rental administration platform Rently reported that, as of 2023 numbers, pretend rental listings have led to a forty five% improve in rental rip-off complaints reported to the FTC and Higher Enterprise Bureau over the past two years. Victims typically lose their safety deposit and first month’s hire. In accordance with a Rently survey, about half of the respondents lose $1,000 or extra, and eight% lose over $5,000.
“As housing demand surges, scammers are exploiting renters’ desperation with alarming precision,” Rently CEO Merrick Lackner stated in a press launch. “Past the monetary loss, these scams create lasting emotional hurt, turning what needs to be an thrilling step right into a supply of stress and heartbreak.”
AI Will Improve Scams
Snappt’s 2024 Fraud Report: Knowledge, Traits, and Methods for 2025 means that synthetic intelligence (AI) will play an more and more important function in would-be tenants scamming, with ever-sophisticated methods of manipulating paperwork.
“As fraud continues to evolve in 2025, leveraging best-in-class doc fraud detection and revenue verification know-how is the one method to catch these unhealthy actors earlier than they lead to monetary losses,” stated Snappt CEO Daniel Berlind within the firm’s launch.
The South Is America’s Scamming Heartland
In accordance with Snappt’s Prime U.S. Cities for Software Fraud 2025, Atlanta is America’s No. 1 metropolis for software fraud, with a 17.9% charge in 2025. Houston is second (16.2%), adopted by Dallas/Fort Price (13.2%).
“Over the previous two years, there’s been a noticeable improve in rental scams, with a better focus within the Houston space,” Michael Molloy, director of the Texas Actual Property Fee, stated in a press launch. “These scams are deceiving landlords, tenants, and even our license holders into fraudulent lease agreements.”
Utilizing an Agent Helps Defend Towards Fraud—Generally
The fail-safe method to keep away from falling sufferer to a rental itemizing rip-off as a potential tenant is to fulfill the “landlord” in particular person. For precise landlords, utilizing a licensed Realtor is the most secure approach to make sure a tenant is just not a rip-off artist. These professionals have a license to guard and entry to firm software program, which is probably going extra rigorous than that of an investor. Nevertheless, even some brokers should not savvy to the strategies utilized by seasoned tenant scammers.
A property proprietor within the celebrity-studded neighborhood of Calabasas in Los Angeles used a good actual property company to search out tenants for her house. After they moved in, they filed a litany of complaints, employed legal professionals, and instantly stopped paying hire whereas internet hosting events. Inside 4 months, the tenants value the proprietor $100,000 in damages.
“They turned my house into considered one of these megamansion celebration homes such as you see on the information,” proprietor Cheri Woods advised the New York Publish.
One New York horror story, depicted in New York Journal, describes the ordeal of a Manhattan landlord who allowed a seemingly well-paid architect with impeccable credentials into her rental—solely to have him demolish the inside and demand cash to depart. It turned out he had finished the identical factor to different landlords up to now, however expertly coated his path.
Seasoned brokers ought to now be ready to go the additional mile to display tenants. “Many, many brokers will run a credit score examine on behalf of an incoming tenant, however not a felony background examine,” Douglas Elliman agent Carl A. Ekroth advised the Publish. “When qualifying any potential tenants, landlords ought to at all times insist on each.”
Homeowners Ought to Oversee Their Brokers
Los Angeles-area actual property investor Jameson Tyler Drew of Anubis Properties advises that landlords shouldn’t rely solely on brokers and may conduct their very own due diligence on the people they rent to vet their tenants.
“I like my occupation, however I would be the first to let you know that there are some individuals on this enterprise who shouldn’t be,” Drew advised the Publish. “I’ve seen brokers and brokers knee-deep in all method of scams.”
Methods Landlords Can Defend Themselves From Scammers
So if you happen to’re a landlord, how do you ensure you don’t fall prey to those frequent scams? Listed here are 5 steps to take.
1. Strengthen screening and authentication
Demand verifiable ID and revenue documentation. Use instruments with enhanced id verification, doc authentication, and credit score and background checks. Apply AI know-how screening options to flag inconsistencies and establish refined solid paperwork.
2. Know the overpayment crimson flag
When a tenant overpays and requests a partial refund, be cautious. It’s a standard rip-off. Confirm the authenticity with the financial institution.
3. Create clear insurance policies round subleasing, and examine itemizing websites
Keep away from itemizing your condo on short-term rental websites by prohibiting subleasing in your lease.
4. Monitor itemizing websites and model your personal leases so others can’t use them
Watermarking your itemizing pictures is an apparent method to deter scammers from itemizing them on the Web. You should definitely keep knowledgeable about what web sites are posting.
5. Insist on safe cost strategies by verifiable platforms
Keep away from wire transfers, cryptocurrency, and present playing cards.
Closing Ideas
Test with native districts concerning the landlord-tenant insurance policies in your space. In New York, skilled tenants have been identified to be allowed to stay in flats for over a 12 months with out paying hire. Ideally, nevertheless, you’ll have stopped a scamming tenant lengthy earlier than they set foot into your condo.
Generally, landlords are so determined to fill their items that they shortcut the vetting procedures. You can be setting your self up for an entire world of harm. The extra particular documentation you require, reminiscent of financial institution statements, letters from employers, and background checks, you can confirm, the extra you’ll deter scammers.
