As fraudsters leverage tactics to manipulate applications, 72% of property management survey respondents cite applicant fraud as a persistent issue.
In an environment of high housing demand and climbing rents, fraudsters are employing a range of tactics when it comes to the apartment leasing process—from manipulating documents, impersonating another individual on documents, and using AI technology to generate fake documents and IDs—according to the new “State of Multifamily Fraud Report” from Snappt.
A leader in fraud detection for property managers, the firm surveyed 900 property managers to gain insights into their daily challenges when it comes to fraud.
Almost three-quarters of the respondents, 72%, said they believe applicant fraud is just as much a problem this year as it was in 2023. In addition, over 60% ranked security and accuracy as top priorities.
“Fraud is evolving at an unprecedented rate, putting immense pressure on multifamily property managers to keep up,” said CEO Daniel Berlind. “Our latest report and new solutions empower the industry to tackle fraud head-on while maintaining a frictionless application process for prospective renters.”
Other key findings from the report include:
- Over half of the respondents, 51%, use ID verification, while 46% are verifying manually and 2% have no verification, making it easier to become a victim of fraud;
- Respondents said the minimum acceptable turnaround time to detect applicant fraud, verify income, and return an income calculation is on average six hours or less;
- Over half of respondents, 53%, reported that they would be willing to sacrifice accuracy for a faster turnaround time; however, 37% said they would not; and
- While 75% said they are detecting applicant fraud through tenant screening, only 51% said they are utilizing fraud detection tools. In addition, 4% reported not using any fraud detection tools.
According to Snappt, property managers must invest in and implement a multilayer system, including document fraud detection, identity verification, income verification, payroll provider connection, inception fraud checks, a list of users and companies who are known threats, and a dedicated fraud forensics team.
Another recent industry report from Rently shed light on fraud from the renter perspective. The proptech firm surveyed 500 U.S. renters 18 and older for its “2024 Rently Survey: Rental Scams and Fraud Report,” which found that 93% of renters believe rental scams are common and 90% worry about falling victim to them.
“As housing demand surges, scammers are exploiting renters’ desperation with alarming precision,” said Rently CEO Merrick Lackner. “Beyond the financial loss, these scams create lasting emotional harm, turning what should be an exciting step into a source of stress and heartbreak.”
Key findings from the report include:
- Over one-third of respondents, or 39%, reported distrusting online rental platforms, with just 0.6% claiming they “completely trust” them;
- Scammers are leveraging Facebook’s wide reach, with 88% of scam victims finding fraudulent listings on the social media site. According to respondents, to entice renters, the listings often feature desirable locations, 57%; below-market prices, 55%; and immediate availability, 52%;
- Among victims, 70% paid a security deposit, 59% paid an application fee, and 50% paid the first month’s rent before realizing they were scammed; and
- The majority of respondents, 92%, said landlords and property management companies should adopt better technology to prevent fraudulent listings. In addition, renters place the blame on rental platforms, 40%, and landlords, 23%.
“Rental fraud isn’t just a financial crime; it’s a direct attack on the trust and stability that renters depend on during one of life’s most critical decisions,” Lackner added. “Our industry must lead the charge in outpacing scammers with stronger safeguards, transparency, and education, ensuring every renter can search for a home without fear of exploitation.”
