Education and news for smart DIY landlords!
Being in the landlording business definitely comes with risks, and one of these is you falling for tenant scams. Scams are everywhere. And while not everyone who wants to live in your rental is a potential scammer, knowing how to spot one protects your investments - before it’s too late.
What are some signs to look for? Read on to find out.
Should you be suspicious if a tenant attempts to pay you the first few months of rent in advance? Definitely. There’s even more reason to do so if the tenant convinces you to skip the screening process. Monthly rent should be paid when it’s due. A criminal can come into your rental with a huge sum of money and there is no assurance as to whether you’ll get paid again in a few months.
While you do credit checks, don’t just check the credit score. Yes, a good credit score does indicate that a tenant is responsible for his finances and able to pay the rent. But of course, it’s a good practice to look beyond the credit score. Pay attention to the tenant’s spending habits. Does the tenant have many addresses in the last five years? Are there late payments?
One of a landlord’s worst nightmares is getting a call from the bank saying that the tenant’s check has bounced. A tenant may reason out that this was caused by a bank error. How long can you keep up with these bad checks? Will you wait until the tenant stops paying rents? Before you let a tenant into your property, confirm that the check has gone through. If tenants want you to understand their financial situation, imposing a penalty fee is one way to prevent this from happening again.
It seems that fake W2s and pay stubs are being sold everywhere and online. These documents even look authentic. While tenants can be arrested for faking their details, you’ll never see their real name and address. As a landlord, you are responsible for your own research.
You can stave off bad tenants by noting these signs of potential tenant scams. One thing to note about bad tenants is that they want a quick turnaround and are trying to defy the way you handle the screening process.
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