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How to Detect and Avoid Tenant Fraud in Single-Family Rental Properties

Rental fraud scams are an unfortunate reality for single-family rental property owners. Many property owners think that tenant fraud happens only in the application process. But that is not always the case. Tenant fraud can happen even after a tenant moves in. The good news is it may be possible to detect and avoid tenant fraud even after these tenants move in. By learning more about some of these fraud schemes and how to avoid them, you can keep from getting scammed by these would-be con artists. Woman looking at computer worried about tenant fraud.

Unauthorized Sublease

One of the most common scams that dishonest tenants may try is to sublease your rental property. For example, a tenant may clear the screening process, but once they have “moved in” to the rental home, they may list it on short-term rental sites like Airbnb. Whether they are trying to sublease a single bedroom or the whole house, such activities are a clear violation of most property owners’ subletting policies.   

Mortgage Loan Against Your Property

Another tenant fraud scheme that can occur after move-in is where a tenant may take out a mortgage loan against your rental property. This gutsy scam begins when a tenant falsifies information to apply for a mortgage loan against your property. They may track down your sensitive financial and personal data and gather paperwork from public records to ensure that they can fool the lender into thinking they are the property owner. Once the loan closes, they will then cash the check and disappear, leaving you to face the debt collectors demanding repayment of the loan. When you go back to try and track down your devious tenants, chances are that they may have used false information on their tenant application, too. Close up of woman's hand doing background check on two possible tenants.

How to Avoid

To avoid being taken in by such a scam, there are a few things you can do. The first is to ensure that you have up-to-date contact information on file with the title company, county assessor’s office, and other relevant local authorities. If available, place an alert on your social security number so that you will know if anyone checks your credit without your permission. Also, you should consider regularly monitoring your credit history to ensure that all of the accounts and requests for credit information are yours. Finally, while it may be difficult to spot the most sophisticated scammers,  conducting thorough background checks on your tenants, including contacting their references and previous landlords, if any, is strongly recommended.

Although rare, such scams do happen. And when they do, it is important for rental property owners to be prepared. By using the resources available to you to help safeguard your private information and investment property, you may be able to better avoid being a target for would-be con artists.  

One of those resources is your locally owned and operated Real Property Management office. We offer thorough tenant screenings and regular property evaluations to help keep our property owners well away from any tenant fraud schemes. For more information, contact your nearest Real Property Management office today.   


We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.