4 Red Flags on Rental Applications You Shouldn’t Ignore

The rental property business is highly competitive. However, that doesn’t mean that landlords and property managers should just accept any tenant that sends an application in. Given the rise of fraud and scams, it’s important that you know which red flags on rental applications to look out for. With this in mind, here’s a comprehensive guide about rental application red flags and scams that you’ll undoubtedly find out there. Read below to learn more.

Main Takeaways

4 big red flags on rental applications landlords shouldn’t ignore:

• Inadequate Information & Financial Instability: Landlords should be cautious of incomplete applications, unverifiable income or employment, and low credit history.
• Negative Rental History: If a tenant has a pattern of multiple, repeated evictions in their rental history, that can be a red flag that a tenant has consistently struggled to meet lease obligations.
• Application Fraud: Landlords need to be on the lookout for common scams such as fake credit reports, fraudulent employment documents, and forged checks.

Top Red Flags on Rental Applications Landlords Shouldn’t Ignore

As an Austin property manager group, we are well aware that landlords need to keep being diligent in screening applicants. Why? It’s how you can find qualified tenants and avoid falling for common pitfalls. To help you with this, here are some of the most common red flags in rental applications that we’ve come across. In our experience, these issues may indicate they don’t meet our standard qualifications for renting.

1. Inadequate or Outdated Information

Let’s start with one of the most obvious red flags on rental applications. A key purpose of the tenant screening process is to allow landlords to get to know their applicants’ qualifications. And in order for you to do this, it’s essential that your applicant is able to provide a complete and accurate form with their identifying details and information.

Omitting information or providing outdated information in an application form is another one of the biggest red flags on rental applications. For example, if they refuse to provide you with their government name and only provide an alias, this will prevent you from running background checks and other verification steps. Aside from this, it raises concerns regarding their honesty and transparency.

As a side note, it’s important that we point out one huge exception to this rule: some applicants may not be able to initially provide complete information because they need reasonable accommodations to help them fill out the application forms, and that’s not a rental application red flag.

2. Unverifiable or Insufficient Income

An applicant’s financial status is one of the primary factors that landlords use to evaluate an applicant’s qualifications as a tenant. In fact, as a general rule of thumb, the applicant’s monthly income should be at least three times their monthly income. Otherwise, they are considered to not have enough wiggle room to afford the monthly living expenses and all the other costs on their plate consistently.

So, one of the primary red flags for rental applications here is if they refuse to provide you with their financial records (or parts of them) to verify they can make the rent. To be clear, you cannot discriminate against applicants based on which source of income they use. However, if they won’t show you that they have any source of income to draw from to begin with, that’s concerning.

3. Poor Credit History

A credit check is another key step in the tenant screening process. As a landlord, looking into an applicant’s credit history not only provides you with a snapshot of their overall financial situation, but also lets you see how they manage their money. This lets you gauge whether you can rely on them to meet deadlines and pay rent on time.

As you can imagine, a possible rental application red flag here is when the applicant has a low credit score. This could directly reflect on their financial habits and their financial stability (or lack thereof). Also, we’ve found that a bad credit score may indicate they have a history of late payments, outstanding debts, and other financial issues that could impact their ability to pay the rent.

4. Repeated History of Evictions 

Aside from the applicant’s financial background, it’s also crucial that you look into their rental history. When you do, one rental application red flag is if they have a history of multiple evictions from various rental properties.

To be clear, we’re not saying that evictions shouldn’t automatically disqualify an applicant. You never know why someone was evicted–maybe they were laid off, faced hefty medical bills, or dealt with other issues out of their control. However, a demonstrated pattern of repeated evictions suggests they consistently struggle to meet the conditions of the lease – whether it’s regarding rent payments or the property’s house rules and regulations. That might be a reason to give pause.

Common Rental Application Scams Targeting Landlords

Fraudsters and scammers lurk in all corners of the rental market. And, unfortunately, they don’t just target renters–they can target landlords, too. Here’s some of the most common ones we’ve found:

• Fake Credit Report: Since credit is a huge factor in tenant applications, some submit fake credit reports to trick landlords into thinking that they have a different financial history than they actually have.
• False Employment Documents: In some cases, we’ve witnessed applicants make up a fake employment history. In addition, some have gone as far as to ask a family member or a friend to pose as previous employers to falsely verify their employment. This way, they can paint a picture of stability they don’t actually possess.
• Third-Party Applicants: In order to hide their own credentials, some people may ask a third party (typically a family member or friend) to submit an application on their behalf. Then, once that third party gets approved, the fraudster will be the ones to actually move in.
• Fake Check Scams: We’ve seen that scammers can also fake written checks by making them look that it came from a reputable bank or financial service company. They make it look meticulously professional and polished. Then, the moment you try to cash the check, it’ll be invalid, and the payment will fail. You’ll be left with nothing.
• Rent Overpayment: Similar to fake checks, some scammers trick landlords by paying more than the requested payment. Then, they will ask you to refund the excess for some urgent reason. By the time you cash in the check and realize it’s invalid, you have also lost the “excess money” you returned to the tenant. It’s sneaky but tends to be unsettlingly effective.

Partner with BMG for Your Property Management Needs

Spotting the red flags in rental applications is one way to protect yourself. But beyond that, what can really make a difference is utilizing professional tenant screening services. And that’s where we step in.

At Bay Property Management Group, we manage over 6,000 properties in Texas, Pennsylvania, Northern Virginia, D.C., Maryland, and more. We have years of rental property management experience screening thousands of tenants, verifying every word and number in their application materials to make sure they’re properly qualified. Want help protecting your investment? Contact us today to learn more!