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Multifamily Rental Property Managers Report Increasing Prevalence of Application Fraud

By: Snappt via GlobeNewswire

July 26, 2022 at 11:00 AM EDT

LOS ANGELES, July 26, 2022 (GLOBE NEWSWIRE) -- Snappt, the leader in application fraud detection for residential apartment property managers, today released the 2022 State of Apartment Tenant Screening Survey. The survey shows 85% of property managers feel consumers are becoming more comfortable with committing application fraud. The pandemic has made things difficult for MDU property managers. Fraud has risen, government-mandated eviction moratoriums have squeezed landlords, and now rents are rising. The average tenant can doctor a paystub or bank statement in minutes to improve their financial picture, and the result is often impossible to spot with the naked eye. Snappt has scanned more than one million financial documents, finding that one in eight have been fraudulently altered. With 3.7 million residential evictions filed every year, costing an average of $7,500 each, evictions are the single highest cost property managers face.

“Application fraud is more prevalent than you would think, especially in a world of online applications,” says Daniel Berlind, CEO of Snappt. “We estimate 11 million fraudulent applications were submitted last year in the U.S. alone.”

Never has the need to accurately screen applicants been so important. Survey results show that the most common goals property managers have when screening applications include:

Make sure applicants have the financial resources to pay rent
Avoid evictions
Reduce criminal activity
Avoid disruptive tenants
Avoid property damage

One property manager in Texas reported, “the amount of fraud that has come through lately has tripled and we have to carefully, with a fine-tooth comb, review everyone’s check stubs.”

The most common problems property managers report facing in today’s market include:

Rent-related issues. Tenants being late on rent payments, paying less than full rent and (worst of all), stopping rent payments completely.
Damaged Properties. Increasingly, property managers are seeing damage done to properties after tenants move out.
Evictions. In today’s world – with the pandemic, rising rents and an increase in fraud, evictions are becoming more common.
Tenants skipping out.
Disruptive tenants/criminal activity.

The problem has been compounded by the rapid adoption of proptech during the pandemic and how easy it is to obtain or create fake documents. Property managers reported that the most crucial aspects of applicant screening they use to address this issue include:

Verify ID is accurate
Verifying the paystub is accurate
Verifying the bank statement is accurate
Check prior evictions
Credit check

But with a large list of screening requirements and available tools, we asked what takes the most staff time to verify applicants:

Verify the bank statement is accurate
Verify the pay stubs are accurate
Checking references

The full 2022 State of Apartment Tenant Screening Survey is available at https://www.snappt.com/state-of-apartment-tenant-screening-2022-survey. The free report includes a list of top strategic tips property managers can take to detect fraud and decrease evictions.

Additional Resources:

Snappt: Blog
Snappt’s LinkedIn

About Snappt

Snappt, a Los Angeles based real estate technology company, provides a quick and inexpensive data-driven fraud detection service that can accurately spot fraudulent documentation. Snappt is used by four of the top five property management firms in the U.S.

Press Contact:
Holly Hagerman
Connect Marketing
801.373.7888
hollyh@connectmarketing.com