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 condominium listed on-line by another person or receiving faux employment and monetary paperwork, coping with con artists is likely one of the explanation why many buyers determine that being a landlord is extra bother than it’s price.
In response to 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 had been fraudulent in 2024—scams have gotten more and more subtle.
Snappt and rentprep.com have listed a few of the most typical scams landlords want to concentrate on. Nevertheless, HousingWire stories that scammers are evading fraud detection software program by utilizing solid pay stubs, altered credit score stories, and faux employment letters. Mother-and-pop landlords who personal single-family properties and don’t have the monetary sources of bigger condominium buildings are more and more within the scammers’ crosshairs.
Profession Scammers
One of the crucial egregious current scams concerned Russell and Linda Callahan, who had been indicted for orchestrating a rental rip-off that stretched out for 20 years in Worcester County, Massachusetts. Amongst their checklist of fraudulent actions had been bouncing safety deposit checks, mendacity on purposes, and defrauding landlords out of over $100,000.
Pretend Landlords
Being a faux landlord is one other well-liked rip-off approach, 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.
Usually, 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 on the subject of faux listings, as a result of it’s the place smaller landlords are inclined to submit, making them simply searchable and capable of be defrauded.
Rental administration platform Rently reported that, as of 2023 numbers, faux 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 usually lose their safety deposit and first month’s hire. In response to 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 mentioned in a press launch. “Past the monetary loss, these scams create lasting emotional hurt, turning what must be an thrilling step right into a supply of stress and heartbreak.”
AI Will Enhance Scams
Snappt’s 2024 Fraud Report: Information, Traits, and Methods for 2025 means that synthetic intelligence (AI) will play an more and more important position 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 expertise is the one strategy to catch these dangerous actors earlier than they end in monetary losses,” mentioned Snappt CEO Daniel Berlind within the firm’s launch.
The South Is America’s Scamming Heartland
In response to Snappt’s High U.S. Cities for Software Fraud 2025, Atlanta is America’s No. 1 metropolis for software fraud, with a 17.9% fee in 2025. Houston is second (16.2%), adopted by Dallas/Fort Value (13.2%).
“Over the previous two years, there’s been a noticeable improve in rental scams, with a larger focus within the Houston space,” Michael Molloy, director of the Texas Actual Property Fee, mentioned in a press launch. “These scams are deceiving landlords, tenants, and even our license holders into fraudulent lease agreements.”
Utilizing an Agent Helps Shield Towards Fraud—Typically
The fail-safe strategy 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 means to make sure a tenant shouldn’t be 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 will not be 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 dwelling. After they moved in, they filed a litany of complaints, employed attorneys, and instantly stopped paying hire whereas internet hosting events. Inside 4 months, the tenants price the proprietor $100,000 in damages.
“They turned my dwelling into considered one of these megamansion get together homes such as you see on the information,” proprietor Cheri Woods informed 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 apartment—solely to have him demolish the inside and demand cash to go away. It turned out he had completed 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 verify on behalf of an incoming tenant, however not a legal background verify,” Douglas Elliman agent Carl A. Ekroth informed 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 mustn’t rely solely on brokers and will 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 informed the Publish. “I’ve seen brokers and brokers knee-deep in all method of scams.”
Methods Landlords Can Shield Themselves From Scammers
So for those who’re a landlord, how do you be sure to don’t fall prey to those widespread scams? Listed below are 5 steps to take.
1. Strengthen screening and authentication
Demand verifiable ID and revenue documentation. Use instruments with enhanced identification verification, doc authentication, and credit score and background checks. Apply AI expertise screening options to flag inconsistencies and determine subtle solid paperwork.
2. Know the overpayment pink flag
When a tenant overpays and requests a partial refund, be cautious. It’s a typical rip-off. Confirm the authenticity with the financial institution.
3. Create clear insurance policies round subleasing, and verify itemizing websites
Keep away from itemizing your condominium 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 strategy to deter scammers from itemizing them on the Web. Make sure to keep knowledgeable about what web sites are posting.
5. Insist on safe cost strategies by way of verifiable platforms
Keep away from wire transfers, cryptocurrency, and present playing cards.
Last Ideas
Examine with native districts concerning the landlord-tenant insurance policies in your space. In New York, skilled tenants have been recognized to be allowed to stay in residences for over a yr with out paying hire. Ideally, nevertheless, you’ll have stopped a scamming tenant lengthy earlier than they set foot into your condominium.
Typically, landlords are so determined to fill their items that they shortcut the vetting procedures. You might be setting your self up for a complete world of harm. The extra particular documentation you require, comparable to financial institution statements, letters from employers, and background checks, that you may confirm, the extra you’ll deter scammers.
