Property managers and leasing teams responsible for screening tenants are walking a tight line these days of quickly getting properties rented without a lengthy process that can be overwhelming to them and the potential renters. Owners often expect their property management teams to have a crystal ball in finding qualified candidates, yet in today's digital economy, there are some major challenges to this. Rental application fraud is on the rise and can hurt the credibility of any property management team. It's no wonder so many are looking for better methods and solutions to ensure that they are not being duped.
Traditional Background Checks Aren't Keeping Up
Background checks of new tenants aren't anything new. What's new is how easy it is for some applicants to submit fraudulent financial information or what looks like a valid bank statement. These bad apples are gaming the application process to get ahead of stronger applicants. All of this new digital fraud is making the traditional background check approaches like checking social media accounts, calling banks to verify accounts, or calling an employer's phone number less effective.
Traditional background checks are easier to do, but every property manager can tell you horror stories of bad renters because they didn't go deep enough on their checks and missed information like rental history, criminal records and factual bank accounts. These types of tenant background checks are harder to access, decipher, and can take a lot of time to collect. All of this is hard enough as it is, but given the current Pandemic world we live in, finding and screening tenants is only going to get more complicated.
If unemployment remains high after the pandemic, the ones to feel the most pain will be property owners and managers. We may see an extension on the moratorium on evictions and states law enforcement are stopping lockouts for the time being. The real answer to these challenging times is how to move past what has been done and get to what can be done?
As property managers, the goal is to keep properties occupied and on budget while reducing the risk of fraud and eviction. To achieve this in today's digital rental economy, you need to implement automated verification technologies that take much the guesswork out of the process. So how can property managers and leasing teams ensure the potential application of technologies will help solve the screening challenges?
What Works Today: Advanced Tenant Background Checks
An idiom that can be applied here is "Fighting fire with fire," just as fraudulent renters use technology to create and submit fake documentation, leveraging advanced technology allows you to see which prospective renters are being honest quickly.
Submitting applications online has become a standard for larger rental properties to gather, assess, and find tenants. For this kind of organization, enhancing the current tenant check requires integrating and an advanced screening solution into the mix. With the right solution, you will be integrating the advanced tenant check on the front end of the application submission process that will reduce time and costs, especially those with the high cost of evictions.
One client of ours was dealing with fraudulent applications on a regular based and needed to attack the issue quickly. By applying Spirited's AI-enabled image analysis solution, they quickly found a variety of telltale signs that the documents being submitted had been altered. What used to take the better part of a day to review just one application is now a much simpler process that results in multiple applications being reviewed and qualified and disqualified significantly faster.
There are a lot of variables that will change the rental and leasing market moving forward, and renter fraud is most likely going to increase due to high unemployment rates. Now is the time to ensure you don't leave your portfolio vulnerable. By adding advanced tenant checks with data-driven results, you will more quickly identify fraudulent or modified documents and minimize losses due to this kind of fraud.
