Protecting Yourself as a Landlord: How to Avoid Bad Tenants and Financial Crime

A bad tenant can be a financial nightmare for landlords. Not only do you lose out on rent, but you may also incur additional costs like damage to the property and legal fees for eviction. In some cases, you may not be able to recover the money you've lost. Therefore, it's essential to take steps to protect yourself from bad actors who have no intention of fulfilling their responsibilities.

Here are six steps you can take to protect yourself from bad tenants and financial crime:

1. Verify tenant identity

One of the easiest steps you can take to avoid bad tenants is to ensure that they are who they say they are. Conduct a thorough background check, including a credit check, and verify their employment and income. You can also search online for any red flags, such as previous evictions or criminal records. By doing so, you'll be able to spot potential warning signs and avoid tenants who may cause problems down the line.

2. Check tenant status

Research the tenant's background and verify any inconsistencies, especially if they're from high-risk countries. Be wary of tenants who apply before seeing the property or offer to pay cash up front.

RentBureau's Best in class referencing service can help you find the right tenant for you by thoroughly checking each tenant for you

3. Know the warning signs

Keep up to date on the latest fraudulent schemes, read up on the Financial Action Task Force (FAFT) and HM Treasury (HMT) list of high-risk countries, and be mindful of risk factors associated with bad tenants.

4. Know who to contact

If you do come across a fraudulent tenant or suspect fraudulent activity, know who to contact. Familiarize yourself with how to file a Suspicious Activity Report (SAR) to the National Crime Agency or Action Fraud. By reporting suspicious activity, you can help prevent further crime and potentially aid in insurance claims. This can help you prevent further crime and potentially assist with insurance claims.

5. Build a good relationship with tenants

Building a positive relationship with your tenants can help you avoid potential problems down the line. Have an open and honest conversation with them to get to know them better. Sometimes a simple conversation can reveal a lot more than a form ever could.

6. Use a reputable property Lettings service

RentBureau can help you avoid bad tenants by conducting thorough background checks, verifying employment and income, and handling tenant relations. They can also help you deal with eviction proceedings and legal issues that may arise. A reputable property management service can save you time, money, and stress in the long run.

As a landlord, protecting yourself from bad tenants and financial crime requires due diligence, vigilance, and building strong relationships with your tenants. By following these six steps, you can mitigate the risk of financial loss and avoid the headache of dealing with bad tenants. Remember, staying informed and being proactive is key to avoiding fraudulent schemes and protecting yourself as a landlord.