Application fraud is growing in residential rental markets since the COVID-19 crisis, according to a new analysis from Snappt, a real estate tech and fraud detection company. Applicant fraud has risen 9% month-over-month since the pandemic, with some inflating their income to qualify for rental or disguising the source of their income. Snappt researchers say that it’s likely a response to the economic climate as well as recent changes to local and state eviction moratoriums.
“There are a number of factors that are fueling the increase in fraudulent rental applications,” says Daniel Berlind, CEO and co-founder of Snappt. “The increasing number of self-employed applicants, a move to online rental applications, and the increasing availability of tools to fraudulently alter financial documentation all make the problem more common.”
Two thirds—or 66%—of property managers surveyed by Snappt say they’ve fallen victim to fraudulent rental applications. Here are the top five problems property managers are reporting from fraudulent lease applications:
- Costs associated with having to evict bad tenants
- Physical damage to the property
- Missing out on renting to good tenants
- Criminal activity at the property
- Loss of reputation
It costs property managers an average of $7,685 per eviction, according to the report.