There’s a reason why “trust but verify” is a common phrase among seasoned landlords: a rental applicant may check all your boxes on paper, but one suspicious employment reference could reveal an entirely different story.

In fact, fraudulent rental applications continue to be a major challenge in the industry. In some rental markets, over 50% of screened applications were found to be doctored in some way.

This is why implementing a thorough tenant screening process and collecting verifiable information is critical to finding reliable renters. Here’s how to put a data-first approach to tenant verification into action and how AI tools are adding a new layer of protection against rental fraud.   

Key data points to screen tenants effectively

Knowing what information to gather from prospective renters is the first step to building a foolproof tenant screening process. You can easily ensure all of your bases are covered with a detailed rental application. Though there isn’t a standard form that’s used across Canada, there are plenty of readily-accessible options, such as the Ontario Real Estate Association’s (OREA’s) 410 form and free templates from tenant screening providers. 

Getting essential information from a potential tenant during the screening stage depends heavily on using a comprehensive rental application. Here are the key items to gather on this important form:

• Personal identification, including full name and date of birth. A valid government-issued photo ID is also important to ask for to confirm the tenant’s identity.
• Social Insurance Number is optional for a tenant to provide, but it improves the chances of getting a match when running a credit check.
• Consent to a credit check by the applicant is required.  
• Contact information, such as phone number and email address.
• Current employment details, including the company, position, and employment start date. This allows you to assess a tenant’s income and ability to pay their rent. Having these details will also help you complete an employment reference check. 
• Rental history, which includes current and previous addresses, the dates when the person lived there, and the reason for moving. This gives you insight into why and how often the applicant moved. It also enables you to dig further about their past behaviour as a renter during a landlord reference check.
• Contact information for employment and previous landlord references
• Income verification documents, like pay stubs or bank statements 
• Pet details, like the number of pets and their breed. If you don’t allow pets on the property, you and the applicant can move on.   
• Co-applicants and additional occupants, along with their relationship to the rental applicant. It’s crucial to know who could be living at your property, and if there’s a co-applicant, you can factor in their credit check (with their consent), income, and other financial details when reviewing the application.  

There are opportunities to ask for more information on the rental application, like if the person has ever refused to pay rent or been evicted, so you can decide if they’ll be a reliable renter and a fit for your property. Just make sure you’re abiding by tenant screening laws and following a fair and non-discriminatory screening process.

How to stay organized (avoid the data avalanche) 

Now that you have all of this tenant data, you may be wondering how to keep track of it. Of course, there are manual ways to organize your rental applications, but it’s more efficient to digitize them and use an online platform to streamline the entire tenant screening process. 

Platforms like SingleKey make it easy for a tenant to fill out a digital rental application, which is then used to complete a credit check through an online portal. A dashboard like the one below not only hosts all of the prospective renter’s details in one place, but also has filtering and search capabilities so you can sort and find your top candidates.   

Technology has made rental fraud easier—but also easier to spot.

You’re armed with all the right tenant details, you have an online tool to manage them, but what’s the best way to verify that the information is accurate and avoid being scammed? 

When it comes to fraudulent rental applications, the most commonly altered documents are credit reports, identification cards, and proof of income like pay stubs. While it’s difficult to catch discrepancies on your own, there are tools to help you verify the authenticity of each of these documents.

Verifying a credit report

For example, all of SingleKey’s Tenant Screening Reports show the date of the report at the top, so you know when the credit check was completed and that the credit details are current. A unique QR code is also included with each report. Since PDFs can be easily modified, this feature allows you to scan and receive a digital copy of the report, ensuring the information hasn’t been tampered with and that it comes from a trusted source. 

Simplifying ID verification 

There are also tenant screening tools to help you verify a tenant is who they say they are. SingleKey’s ID Verification guides an applicant through an online process to validate their identity. The system then runs an automated check by comparing an image of the applicant’s photo ID to their live selfie to ensure they are the same person. 

The data that’s pulled from this process is also cross-checked with the information on the person’s rental application. The results are summarized in a series of pass-fail criteria that include name and date of birth matches. Here’s an example of what the ID Verification report looks like:

Detecting document fraud   

The rise in manipulated proof of income documents is also a challenge for landlords. To combat this, AI-powered tools like SingleKey’s Document Verification automatically cross-reference uploaded pay stubs and bank statements to the information a tenant has provided on their rental application. This generates an overview that indicates which details match and which ones do not, like in the sample below:

Everything from inconsistent fonts to the use of a PDF editor is picked up by the Document Verification tool. 

Data doesn’t lie

When choosing tenants, we all do gut checks as landlords. But intuition can only take us so far, especially when competitive rental markets and tough economic times have made fraudulent applications commonplace.

That’s why adopting a data-driven approach is critical to tenant screening. Facts are objective, and knowing what information to collect when considering potential renters makes it easier to gain deeper tenant insights and make wise leasing decisions

It’s also the perfect time for technology to take a bigger role in how we screen tenants. Given the advancements in AI tools that can automatically verify IDs and detect document fraud, choosing not to leverage these innovations could open landlords up to greater risks. 

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Disclaimer:

This is an Opinion article submitted by a member of the Openroom community. The author's opinions are not necessarily representative of Openroom. Openroom has an objective to publish the voices of the rental ecosystem to ensure there is dialogue amongst all.

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