Owning an investment property and renting it to qualified tenants can be a smart way to generate passive income and build equity. However, not every rental applicant has honest intentions. With technology making it easier to falsify documents and identities, rent scams are on the rise. Some applicants may refuse to pay rent, provide fake references, or even squat in your property.
While these scams aren’t the norm, they do happen—and they can be costly. To protect your investment, it’s critical to have a strong tenant screening process. Below are essential strategies every landlord should implement to reduce the risk of rental fraud.
1. Get to Know Your Rental Applicants
A quick online application isn’t always enough. Take the time to speak with potential tenants—either during a showing or through a follow-up call. Ask questions like:
- Why are you moving?
- What features are you looking for in a rental?
- Have you had any issues with past landlords?
These questions help you better understand the applicant’s motivations and personality. If something feels off or inconsistent, it may be a red flag worth investigating.
2. Run Your Own Background and Credit Checks
Never rely on reports provided by the applicant or third parties you can’t verify. Instead:
- Order your own credit reports and background checks.
- Contact employers directly and confirm job titles and salaries.
- Call previous landlords and ask specific questions (see below).
- Verify addresses, names, and documents for consistency.
Doing your own due diligence helps reduce the risk of fraudulent applications and protects your property from rent scammers.
3. Verify Prior Landlord References
Ask for the names and contact information of at least two prior landlords—not just the most recent one. When speaking to previous property managers, confirm:
- That they actually managed the listed address.
- That the rent was paid on time.
- If there were any lease violations or damages.
- If they would rent to the applicant again.
To verify landlord identity, check county property records to match names with property ownership.
4. Review the Applicant’s Credit Report
A credit report offers a snapshot of your applicant’s financial behavior. Look out for:
Missed or late payments
Excessive debt
Collections from utility companies
Bankruptcies or tax liens
While some debt isn’t a dealbreaker, a pattern of financial irresponsibility could suggest future rent payment issues. Learn more from Investopedia: What Landlords Look For on a Credit Report.
5. Verify Income and Employment
Confirm that your tenant earns enough to comfortably cover the rent (typically 2.5–3x monthly rent). Request:
- Recent pay stubs
- Bank statements with matching deposits
- Contact information for their current employer
If the employer is unknown or unlisted, investigate further. Look for a company website or a LinkedIn profile to verify business legitimacy.
6. Always Run a Background Check
Background checks help confirm identity, address history, and any past criminal records. In particular, look for:
- Financial red flags (judgments, liens, bankruptcies)
- Criminal history (as permitted by local laws)
- Employment history
Understand your responsibilities under Fair Housing laws and California tenant screening laws if you’re in the state.
Why Work With a Property Management Company?
Screening tenants can be time-consuming—and mistakes can be costly. A professional property management company has the tools, experience, and legal knowledge to thoroughly vet applicants, minimize risk, and avoid scams.
At AllView Real Estate, we specialize in property management throughout Orange County, Los Angeles County, and San Diego County. From luxury homes and apartments to investment portfolios, we help landlords:
- Find qualified tenants
- Avoid rent scams and legal pitfalls
- Maximize rental income and property value
Let’s Protect Your Investment
Partner with AllView to simplify the screening process and gain peace of mind. Call us at (949) 400-4275 or contact us online to get started.
