How Do You Identify Your New Tenants?

Do you require proper identification for someone to rent from you?

We live in a world where it is easier than ever to create a fake identity.

The warning signs and red flags can sometimes be really easy to identify and other times not so much.

A common story that a professional tenant might tell you is that they are relocating to your area.  They will then either choose a distant part of the country or another country.

A few years back, there were a lot of stories in the news about nice looking, well dressed people tricking landlords into renting them a house.  Then they would turn the keys over to a weed grower, and next thing you know the house is full of mold, on the news and likely destroyed.  The most common victims of this crime are out of town landlords, with a minimal amount of properties, and a lack of local property management.  They are easy targets for criminals, since the cheques keep clearing, no tenant complaints, so the landlords think they have a great tenant.

Also be aware of deposit scams – I think pretty much everyone can identify with hearing about the pay pal scams on landlords from countries such as Nigeria.

In these types of scams the tenant prospect would often tell a story of how they were coming from far away and want to make sure they secure a place to live before they arrive.  Then they offer to pay the deposit and likely a couple of months rent up front.  They send too much and say no problem, just send the extra back.

By the time the unsuspecting landlord sends back the “overage” the original amount gets pulled from their account as well.

Then how about the scammers posing as landlords and stealing your ads, only to collect deposits from out of town prospects for apartments that do not even belong to them.

What I want to speak about today is about identification when you have the tenant face to face.

I have to admit when I started out as a landlord, I have been guilty of not checking for picture identification when I have rented apartments.

I also want to mention some professional tenants may even have fake identification that appears real.

I do recommend checking anyway.  If you are still suspicious ask for additional supporting documents like a pay stub or utility bill.  Even some tax information like a notice of assessment.

Story From A Property Manager Friend

I want to tell a story I received from a property manager friend a while ago.

He showed a prospective tenant an apartment.  The prospect filled out an application that included references.

My friend checked the references and everything seemed great.

He arranged a lease signing and met with the prospect.

When they met to sign, something did not seem right.  His gut told him the guy about to sign the lease was not who he claimed to be.

He asked for ID (as he always does) before the prospect signed.  The question was met with an awkward silence

Then the guy about to sign the lease stood up and left.  He knew he was caught, he had nothing else to say.

After some further investigation post event, it turns out the guy used a fake name and fake references to pass the screening.

He is allegedly a not so ideal tenant, so this situation could have ended badly.

The scary and unfortunate part of this story is that I can imagine this trick could and likely did work with the next victim.

My friend runs a larger more established property management company, so there were more odds of him getting caught.

Usually these types of tenants tend to search for independent landlords who are not represented by property management companies and may have a less rigorous approach to tenant screening

Here are some ways you can protect yourself:

Google all provided reference phone numbers.  If they provide a name and number for a person at company X, call company X and ask for the person.  A scammer can easily provide a friends phone number as a work reference.

Check I’d (require a photo ID at lease signing)

Get pay stubs for employment verification.

Credit Checks

Do a credit check on all final applications.  The money spent on a credit check will seem insignificant to the amount of time, emotional energy and cash you will spend on a bad tenant.

The credit check is not just about the credit score.  It is about the story.  We have seen applications where the prospect said they were new to the area, then when we ran credit, it turns out they lived in three other local apartments and stopped paying rent at every single one of them.

Online Application Approval

If the screening process and rent / deposit collection happens all online make sure to verify the ID when they arrive.

If you are an absentee landlord and do not have a property manager, have a friend or hire someone from the community to check on your property.

We have discovered many inconsistencies on applications over the years that have likely saved us a lot of time, emotional energy and cash.

The bottom line is that you need to know how to properly identify the people you are renting to.

Until next time,

Design your landlord experience,

Michael P Currie

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