At present, the experience of rental housing has changed exponentially. With the boost in application technologies and digital methods, fraud in the rental sector is becoming more prevalent. While fraud has been a threat to property managers and owners, Menifee property management mandates it is crucial to understand the risk of fraud and how to deter it.
Fraud in a Digital Era
To appeal to customers, landlords are consistently transitioning to online interactions with prospects and tenants. Around 61% of rental applications are submitted online. It increases efficiency and convenience in the rental procedure. However, this makes it complex to verify identity and confirm application validity while accepting rental applications.
Even Winchester property management firms have experienced housing fraud in some form or another. The digital world also brings new challenges to tenant screening and defining the quality of a potential tenant that can impact the security of the landlord’s property.
One cannot understate the dangers of fraud. No one wants to deal with a fraudulent application. Landlords face various challenges and consequences from the growing rates of housing fraud. A scam in the rental industry results in increasing evictions, reputation damage, vacancies, financial loss, and internal time spent recognizing disparities in an application. That is why it is imperative to understand the types of fraud and know how to avoid them.
Types of Rental Fraud
Fraud in the rental property management area takes place in various ways. Working with scammers is always a challenge for property managers and landlords as their methods continue to grow and modify. You should know about these common types of fraud and how to identify them.
- First-party Fraud: It takes place when the person directly uses altered or fake details to qualify for rental properties, such as providing the wrong property address. Property managers should check the background of tenants by confirming various things, including why they vacant their last house.
- Third-party Fraud: It occurs when a person’s identity or details is utilized to qualify for a property, such as using someone else date of birth or name. Cross-verification is essential to prevent this fraud.
- Rental Application Fraud: It refers to directly lying on a rental application, including false income or using someone’s photo.
- Synthetic Fraud: It is increasingly the common type of fraud. A fake couple uses property management services to get the home and then commence with their fraud work.
Preventing Rental Fraud
Property managers and landlords face several weaknesses and challenges in recognizing and neglecting fraudulent applicants. Property management companies have experienced differences in applications, lacking money or time to invest in buying, lacking resources and skills to recognize fraud, and upgrading fraud identification tools. Many present fraud solutions are more reactive than fierce, so no action is taken after tenants move in.
Some effective fraud prevention tactics include understanding past transactions and identity verification during the application procedure. It is essential to get confirmation about applicants before showing them the rental properties.
The best way for property managers and owners to protect themselves is to learn about consistent fraud management strategies to identify fraud quickly.
Benefit National Property Management 