Real Estate Investors learn very quickly how costly a vacancy can be against their cash flow. Placing high quality tenants that will stay for the long term becomes your number one priority. The journey towards finding the perfect tenant ends with your screening process and this could be the make or break moment of your investment strategy. Acquiring references from previous landlords should be a mandatory item on your screening check list, to ensure that your applicants have a solid history of previous renting. There is unfortunately a small subset of tenants that will provide fake landlord references in order to cover up a blemish on their rental history. Whether it’s a history of late payments, bad relationships with previous landlords, etc., there are services such a Paladin Deception that will provide false Landlord reference letters and even staged phone calls that will provide a bogus reference for your applicants.
As a property owner, you want to protect yourself against these scammers and avoid renting to them at all costs. Put on your detective hat and check out these tips on how to spot the schemers.
#1: Become An Actor
Pick up the phone and call the number, not as a landlord but as a renter interested in their property. If the person is a fake, they will be caught off guard, mumble and reveal their inner truths over the phone as the ultimate red flag. If you want to take the extra step, try to schedule an appointment to go see one of their properties. A fake would likely cancel.
#2: Study the “Landlord’s” Response
As the landlord, really probe and see if their responses are abstract and vague. If they refuse to answer the question, change the subject or can’t provide any concrete details, this can be a surefire sign of an imposter. Also if the responses are too personal, it points at the fact that this person may be a family member or a friend posing as a landlord.
#3: Social Media
Social Media is a valuable tool when it comes to investigating. Private investigators often use it as a resource when trying to track people down. You should use Facebook and Instagram to look up the reference’s name and see if there are any mutual friends that stand out. You may stumble upon a group of friends and family all posing as each other’s landlords. Keep in mind that some people actually do have personal relationships with their landlords and some landlords may not specify their jobs on social media.
#4: County Tax Records
Luckily, tax and land records are available to the public so you can easily cross reference a landlord’s name and see what comes up in the database. It will check out if the address matches the name, but keep in mind that even these databases may have discrepancies if the landlord sold the property.
#5: Ask for Specifics
Go all in on your investigation and ask them for specifics only a landlord would know. Like how many units are in the building or how much square footage there is. Try and catch them in a lie. Provide information that you believe to be untrue or inaccurate and if they do not attempt to correct you and simply agree with what you’ve said, there is clearly something strange going on.
There is no perfect system and the methods described above are not foolproof. Every additional effort you make, however is one small step towards finding that right tenant. At a certain point you reach a ceiling in terms of the thoroughness of your screening; at which point you have no choice but to take a leap of faith and hope for the best, knowing that you did everything in your power to find that perfect renter!