Phantom Renters And Scammers Equal Serious Losses For Landlords

Renters aren’t the only ones losing money to fraud and scam artists. According to new data, a whopping 80% of property managers have fallen victim to fraud in the last two years.

A full 75% of those landlords were unaware of the scam until after move-in, only noticing when a rent payment was missed or another issue occurred. More than a quarter didn’t notice until seven months later or more.

By then, thousands of dollars in rent and other costs have already been lost. According to TransUnion data, an average of $4,215 is owed per fraudulent tenant, and that doesn’t even include the costs to evict, the lost rent during the months-long eviction process and the additional costs of marketing, readying and re-leasing the property.

An Even Bigger Problem

It doesn’t stop there, though. According to Mike Doherty, senior vice president at TransUnion, there are even more long-term costs to consider.

“Besides the huge potential financial losses, reputational damage is also a top concern of how fraud impacts the organization,” Doherty said. “With some of these emerging fraud types, such as synthetic fraud, the process can become even trickier as the ‘resident’ may not even exist in the first place. This saddles property managers with an even longer time frame for identifying and addressing the issue.”

Synthetic fraud — one of the more common types of renter fraud — occurs when the applicant creates a fake identity in an attempt to secure an address, open lines of credit using that address, and then run up the balances until they’ve been maxed out.

“Synthetic fraud has become a new weapon of choice for fraudsters in which the applicant is nothing more than a manufactured identity,” Doherty said. “In the rental industry, these fraudulent identities are used during the application process and if approved, the fraudster now has access to an address for the purpose of establishing credit. While the fraudster is running up high balances or maxing out credit cards under this false identity, property managers are left with a renter that does not exist and is likely not paying rent.”

The problem lies largely in online applications, which now account for 59% of all rental applications, according to TransUnion.

“Online applications are outpacing those that are submitted in-person,” Doherty said. “This shift to digital has increased accessibility and convenience but as a result, has also increased the propensity for fraud.”

Still, online applications aren’t all that’s at work here. According to James Hilliard, vice president of GM screening at RealPage, data breaches, cyber attacks, and easier access to falsified documents also play a role. Falsified documents only cost a few hundred dollars and take much longer to detect compared to other types of fraud, Hilliard said.

Proactive Prevention

Unfortunately, stopping fraud against property managers isn’t always easy — especially as scam artists get savvier. In fact, according to the TransUnion study, 95% of property managers say they have difficulty identifying, preventing and mitigating fraud.

There are certainly red flags landlords can look out for. According to Hilliard, these include things like exorbitant behavior, lavish income claims, refusal to meet in person or a thin credit file. Only listing friends or family as references is also a warning sign.

But noticing these things isn’t always a sure-fire way to recognize fraud — and denying a renter based on them could even pose legal issues.

“Oftentimes even these basic red flags can be deceiving,” Hilliard said. “Applicants live remotely, use a nickname or middle name, or are young or foreign-born and have no established credit history. What’s more, leasing staff individuals can open themselves to Fair Housing related legal issues if their fraud-seeking actions are not applied equally across applicants.”

Ultimately, the best approach is a multi-layered one, Doherty said. Properly pre-screening tenants, requiring all documentation and identification match exactly and using technology solutions designed to mitigate fraud can all help address the issue more comprehensively.

SOURCE: Forbes dot com, 

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2 Major Reasons Why Inventory Is So Low

Inventory of available homes on the market is the lowest it’s been in two decades, but the reasons may surprise you. Two of the likely culprits are baby boomers and homeowners who are simply satisfied with their home, according to®’s Housing Shortage Study.

Baby boomers are showing a desire to age in place in their current homes, and their refusal to sell is creating a clog in the market, according to the study. Eighty-five percent of baby boomers surveyed say they are not planning to sell their home in the next year. That means 33 million properties—many of which are urban condos or suburban single-family homes—will stay off the market. Many of those properties would be popular choices for millennials, a generation still largely waiting in the wings to break into homeownership.

“Boomers, indeed, hold the key to those homes the market desperately needs, both in the urban condo and the detached suburban home segment,” says® chief economist Danielle Hale. “But with a strong economy and rising home prices, there’s really no reason for established homeowners to sell in the short term. Although downsizing might be on the minds of boomers, they face the same inventory shortages and price increases plaguing millennials.”

Furthermore, 63 percent of respondents to the survey indicate that their current home meets the needs of their family. They cite low interest rates (16 percent), recently purchasing their home (15 percent), and needing to make home improvements and low property taxes (each at 13 percent) as reasons not to sell. “Life events drive real estate transactions,” Hale says. “When the majority of homeowners feel their family’s needs are being met by their current home, there is nothing compelling to them to put their home on the market.”

There may be hope that more starter homes will hit the market soon. Possibly offsetting the low supply of starter homes, which is down 17 percent year over year, 60 percent of respondents to®’s survey who did say they plan to sell in the next year are millennials who want to move to a larger home or one with nicer features.

“The housing shortage forced many first-time home buyers to consider smaller homes and condos as a way to literally get their foot in the door,” says Hale. “Our survey data reveals that we may see more of these homes hitting the market in the next year, but whether these owners actually list will depend on whether they can find another home.”


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12480 Escala Ln San Diego, CA 92128

***New Rental Listing Alert!***

5Bed…4Bath…2,755 sq. ft. pool home…$3,300/mo! (RENTED!)

Welcome to your beautiful 5 bedroom Rancho Bernardo pool home! Features include large dual master suites (one downstairs) each with own private full bath, lovely dual pane windows/sliders throughout, newer tile, countertops, and appliances in kitchen, great floorplan perfect for entertaining! Enjoy your own private pool/spa, the peaceful and quiet cul de sac location, the great views, and top rated schools! This wonderful property is close to all shopping, dining, golf, freeway access and more!

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***Agent & tenants to verify all information before signing lease agreement. All information is taken from public records and deemed reliable but not guaranteed.***





7958 Mission Center Ct. Unit E San Diego, CA 92108


2Bed…1.5Bath…1,008 sq. ft….Condo…Priced at $1,650/per month!…(RENTED!)

Centrally located condo for lease in the heart of Mission Valley! Spacious 2 story upstairs unit with private balcony. Walk in closet in master. Includes refrigerator and dishwasher. 2 reserved parking spots right in front of unit. Complex includes heated pool and Jacuzzi spa, BBQ area with picnic tables, and laundry room. (All very close to unit) Water, Trash, HOA, and Cable Included! Enjoy nearby shopping and dining with this perfectly located San Diego Condo.

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***Buyer to verify all before COE, information is deemed reliable but not guaranteed. Agent has taken all info from public records and has not independently verified.***