Rental fraud has existed in the US for a long time, and it is anticipated to increase due to recent economic challenges as a result of COVID-19. Whether a prospect is committing fraud by inflating their income, disguising the source of their income, or using fake identification, landlords and property managers have become the victims of rental fraud. Rental fraud can lead to several costly expenses for property managers, especially in the multifamily housing industry. The cost of evicting tenants, to dealing with damaged property, and the loss of your good reputation, it can be detrimental. Understanding these costs of rental fraud and how to prevent it, is crucial.
Evicting Bad Tenants
When rental fraud occurs, oftentimes renters have misled landlords about their income, identity or credit, and eventually are unable to pay rent. This leads landlords with only one option; eviction. Not only is eviction a hassle, but it can be a long and costly process for landlords. According to a report by Snappt, on average, it costs landlords $7,685 per eviction. Between filing for the eviction, the costs associated with court hearings, potential lawyer fees, etc., the costs can add up.
Criminal Activity & Physical Property Damage
When people use fake identification to rent properties, it’s not uncommon that they’re hiding some sort of criminal background that could prevent them from getting the rental. Opening up your property to fraudulent renters can become quite the liability if they’re committing criminal activity in this space. As the property manager, it is your responsibility to put a stop to any criminal activity, such as drug use, prostitution, violence, etc. If you do not, you run the risk of being sued for creating a public nuisance, which is a large cost for any landlord to endure. Additionally, if the activity caused any physical damage to the property, these costs can range from a few hundred to thousands of dollars.
Loss of Reputation
While most of the costs associated with rental fraud are monetary, the loss of your reputation could be even more costly than you realize in the long run. A bad experience with tenants and rental fraud can affect your future rentals and potentially cost you.
Missing Out on Renting to Good Tenants
When landlords spend their time and funds on dealing with rental fraud, they’re missing out on renting to honest, reliable tenants. The loss of money from these rentals can add up to a great amount of loss over time.
Preventing the Costs of Rental Fraud with CheckpointID
As a property manager, rental fraud can be a costly and time-consuming issue that you do not want to deal with. At CheckpointID, we provide online verification software that scans potential renters’ IDs in seconds. Verifying IDs can help to prevent rental fraud, improve leasing safety, and protect your financial investment. Learn more about how the product works here, and request a free demo today!