Rental Scams: How Landlords Can Spot and Avoid Them

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  • Nathan GesnerBusiness Member
    Moderator
    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    4y

    Good article. Technology made it harder to scam when we got electronic credit/criminal background checks, the ability to track down old Landlords, etc. Unfortunately, people are learning how to create new scams using the technology. It's important for Landlords to stay educated. Thanks for sharing!

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  • Holly Giles-Ragan
    Member since 2022 · 2 posts · 0 votes
    4y

    How do you calculate the score for each applicant?

    I did something similar, mapped out as a decision model. Would love to validate my criteria and decisions with yours.

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  • Katie Rogers
    Santa Barbara, CA · Member since 2015 · 644 posts · 17 votes
    4y

    Double check that "filed an LLC four months ago" was not simply a company reorganizing. An ongoing tenant's employer filed its first LLC ever during the tenancy, even though the employer has been in business in my community for over twenty years as some other tax entity.
    PS "Trust but verify" needs to be retired. It is simply "verify."

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  • Krystof Pilisiewicz
    Investor · Tampa, FL · Member since 2016 · 60 posts · 13 votes
    4y

    I just bookmarked this website. Good to know!

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  • Tracy Spencer
    Investor · Phoenix, AZ · Member since 2010 · 27 posts · 8 votes
    4y

    I'd love some more details on how you decide where a tenant places in the matrix as well.

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    • Kevin Hill
      Investor · Bourbonnais, IL · Member since 2016 · 38 posts · 8 votes
      4y

      I'd like more insight on the matrix as well.

      0Reply
  • Susan GoldthorpPro Member
    Investor · Mims, FL · Member since 2013 · 13 posts · 2 votes
    4y

    The other big rental scam is people falsely claiming to be landlords and advertising properties that are not theirs to rent. Tenants also have to be careful they are not being scammed and pay out money to the wrong person. I have lost count of the number of properties I have for sale where the photo's are scraped and advertised on Craigslist for some ridiculously low rent the person turns up at the property and luckily for them find my details before they have paid out anything.

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    • Keri Lamb
      Investor · Calhoun, TN · Member since 2021 · 23 posts · 13 votes
      4y

      This has started happening to me as well! Is there anything you have found that works to deter this?

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    • Kevin Mirise
      Cohasset, MA · Member since 2017 · 13 posts · 8 votes
      4y

      Watermark on photos is one, but it's not foolproof. Your management company name (or something else the scammer wouldn't want in large bright font across each photo)

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    • Karen Gauthier
      Topsfield, MA · Member since 2014 · 1 post · 0 votes
      4y

      Someone is scamming me also. They post on FB marketplace. I've marked it as a scam on the ad with no results. What can be done to remove the scams and prevent innocent people from losing money?

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    • Kristan Pennington
      Member since 2021 · 1 post · 0 votes
      4y

      We use watermarked photos in our ads. We also put a disclaimer in our ads about scams. Since we started using watermarked photos, the number of scams dropped significantly.

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    • Debbie Goings
      Springfield, OH · Member since 2017 · 4 posts · 2 votes
      3y

      How do you watermark a photo?

      0Reply
  • Jovanka Estrada
    Member since 2022 · 1 post · 0 votes
    4y

    Good point. Thanks for sharing!

    0Reply
  • Ed Jerum
    Woodland Park, CO · Member since 2015 · 11 posts · 48 votes
    4y

    Pretty simple to avoid scams. Get credit report and require excellent credit (700+for my rentals). Call all rental and employer refs. Do a video interview. I take the time to meticulously screen and have never had an issue in almost 10 years. I have a very profitable but small rental business. I would not expect a management company to be as thorough if they have many units but my approach almost totally eliminates second guessing

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    • BiggerPockets TeamPro Member
      OP
      Member since 2026 · 14k+ posts · 8 votes
      3y

      Agreed: Due diligence on the landlord's part goes a long, long way. I am surprised how often folks don't call references, particularly past landlords. I am also surprised how often applicants return incomplete applications. I can't check you out if you don't let me check you out.

      Originally posted by goeswithoutsaying.

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  • Kenneth Horwat
    Property Manager · Miami · Member since 2021 · 1 post · 0 votes
    4y

    higher a professional property manager

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  • Brent Romeo
    Investor · Seattle WA · Member since 2021 · 37 posts · 5 votes
    4y

    3 months security Deposit? at that point you should probably just deny them. The last house I rented was $3200.If I was asking for them to pay 3 months security deposit plus first and last month's rent then I would be asking for $15k. You would be laughed out of the market. Very very few people have that kind of cash just sitting in a checking account. Most Americans live paycheck to paycheck. Maybe that works in some markets but that get my management company a 1 star review

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  • Robert Johnson
    Member since 2020 · 24 posts · 42 votes
    4y

    Just list the hurdles upfront. Also insist on significant cash if possible. Out of the last 3 leases I negotiated, I asked for a year upfront. Two out of the three agreed. The 3rd one paid 3 months upfront and agreed to electronic payments.

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    • BiggerPockets TeamPro Member
      OP
      Member since 2026 · 14k+ posts · 8 votes
      3y

      I saw a property that had been trashed by tenants paying for a whole year upfront. Paying a year in advance usually means that since the landlord has the money, he never comes around to the property. The tenants had shoveled two feet of dirt into the living room and created a marijuana farm. Think of the water damage and mess when the year was up, the tenants had disappeared without a trace, and the landlord finally opened the door. The landlord threw in the towel and put the property on the market, and that's when I saw it. The lot was eventually scraped.

      Originally posted by Lucas.

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    • BiggerPockets TeamPro Member
      OP
      Member since 2026 · 14k+ posts · 8 votes
      3y

      The easiest way to fix that is to stipulate in the lease that you will be entering the property once a month to assess maintenance needs/tenant compliance. Or at random; whatever. You just need to enforce it by actually checking the property once a month.

      Originally posted by Michael Marshall.

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    • BiggerPockets TeamPro Member
      OP
      Member since 2026 · 14k+ posts · 8 votes
      3y

      Absolutely. But reality is that a lot of landlords require credit reports precisely because they are more interested in whether the money will be forthcoming than anything else. A year's rent in advance is therefore just fine with them. Credit reports will NOT tell a landlord important information about the quality of a prospective tenant. And a lot of great tenants do not even have credit reports, visiting scholars for example.

      Originally posted by Lucas.

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    • BiggerPockets TeamPro Member
      OP
      Member since 2026 · 14k+ posts · 8 votes
      3y

      It would freak me out to see a tenant who wanted to pay a year up front or who agreed to that. That means their standards for the place (which they have only toured) and for me are low. They want quick, guaranteed access to my place and are hoping for an unusual amount of privacy. Why? The asset I have and/or the repairs I might have to make to a place that someone was desperate to pay a year's rent for (if they had nefarious plans) is worth way, way more than that one year of rent. Also, to take a year's rent in exchange for a good financial history is to decide that you don't care about what credit ratings are designed to do: Show a long, consistent record of behavior. No landlord needs one giant payment as security; they need good, predictable behavior.

      Originally posted by goeswithoutsaying.

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    • BiggerPockets TeamPro Member
      OP
      Member since 2026 · 14k+ posts · 8 votes
      3y

      All valid concerns, but a credit report will give you no information about other sorts of important behavior besides whether they pay their bills. Even then, landlords accept credit scores that really aren't that great to begin with.

      Originally posted by Lucas.

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  • BiggerPockets TeamPro Member
    OP
    Member since 2026 · 14k+ posts · 8 votes
    4y

    As an eviction and collection attorney the biggest issue I see are poorly documented leases and applications.

    Often times when I’m doing an intake with a client and I asked them why did they rent to this person? The answer is almost always the same they seem like an honest person I wanted to help them out.

    What amazes me even more is how this is often times with people who have just a few rental properties and they just spent thousands of dollars remodeling the place before the tenant moved in who ultimately trash the place and never paid rent.

    For a small fee of $35-$50 which the landlord can easily make the tenant pay for they should be able to get a full report including a credit bureau as well as a nationwide eviction report along with a criminal background check.

    It’s amazing how many times I get a file that has no Social Security number or a copy of the Social Security card or a drivers license let alone any of the other items that were mentioned in this article such as paystub‘s or references.

    Wow a tenant screening kit find everything I often find that the landlords have brought this upon themselves by being Pennywise and pound foolish.

    Originally posted by David Lippman.

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    • Katie Rogers
      Santa Barbara, CA · Member since 2015 · 644 posts · 17 votes
      4y

      But see: https://www.justice.gov/opc...

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    • Anne Jenkins
      Investor · PA · Member since 2019 · 56 posts · 52 votes
      4y

      I have been a landlord for over 20 years. I am always surprised that NO other landlord...not ONE has ever called me check on a current tenant leaving my unit. It would definitely save them a ton of regret if they did.

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    • Fred Smythe
      Member since 2011 · 3 posts · 1 vote
      3y

      See https://faq.ssa.gov/en-us/T.... "Anyone can refuse to disclose his or her number, but the requester can refuse its services if you do not give it. Businesses, banks, schools, private agencies, etc., are free to request someone's number and use it for any purpose that does not violate a federal or state law. Sometimes they will issue a different number if you ask."

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    • BiggerPockets TeamPro Member
      OP
      Member since 2026 · 14k+ posts · 8 votes
      3y

      True enough. Maybe they can request it, but you are not obligated to provide it. If they deny services, fine. Go somewhere else. Scams are not a problem I have with tenants. The problems I usually have are not revealed by credit checks, but more likely revealed by a peek into their car. One of the last places that should have driver's license numbers AND Social Security numbers is a property manager. Their employee turnover is high, and who know what personal info an employee takes with them. Where do you think people who file fraudulent tax returns in your name get the info? One place is property managers because those files have everything needed to fake a tax return.

      Originally posted by Lucas.

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    • Alex H.Pro Member
      Rental Property Investor · Batavia, IL · Member since 2015 · 4 posts · 0 votes
      3y

      I agree, but then again I dont think an existing landlord will give less than glowing feedback on a tenant that then want out of their place and have them be someone elses problem. I would recommend digging one more layer and request info on the previous landlord to the most current also, so as to get an unbiased report on how they were as a tenant.

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  • Maria Afsharian
    Real Estate Broker · Montclair NJ · Member since 2019 · 18 posts · 17 votes
    4y

    Another reason to use a broker to help landlords find tenants. While nothing is foolproof, the screening process is pretty rigid - within the law - and the applicant pays for the background check and report.

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  • Gerald Peters
    Investor · Huntsville, TX · Member since 2015 · 43 posts · 65 votes
    4y

    Just do the work of being a landlord. You can do everything a “professional” property manager does better and faster if you decide to. It’s not rocket science. Actually common sense. Pretend like your giving this stranger $100k+ in cash, how I look at it. So I need to know more than I want to know about them.

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