For many landlords in Kenya, residential rental property seems like a safe investment with little stress. However without proper management, you can lose money and incur losses from the same investment. Ensuring proper management to avoid losing money can be a headache and time consuming for many landlords and property managers. This is because many landlords have to deal with dishonest caretakers and tenants. Below are some of the ways caretakers and tenants steal from landlords.
Caretakers can be cunning and can find means of exploiting their landlords and may take advantage of their position as the middlemen to fraud their landlords in the following ways;
1. A caretaker could choose to report that a tenant moved in or moved out at an earlier or later date than the actual date and thus they end up accommodating the tenant for extra days without the knowledge of the landlord. The rent money for these extra days is paid to the caretaker instead of the landlord who still thinks that the house is unoccupied.
2. Caretakers of high-end apartments might be tempted to steal fixed appliances e.g. bulbs, cables and light fittings. The landlord then has to incur an extra cost of replacing them and thus leads to unnecessary expenses.
3. Caretakers can also engage in financial theft where they lie to the landlord about not receiving rent payments but asking tenants, especially new tenants to wire the money directly to their personal accounts.
4. Rentals call for regular maintenance in order to maintain the market value, but this in turn creates a loop hole for caretakers to steal from landlords where they can lie about fixing something that was really never fixed in the first place, the caretaker ends up pocketing the money at the expense of the unknowing landlord.
5. Caretakers also can quote inflated prices for repairs done on the property. The landlord thus has to dig deeper into their pockets and the extra money is being pocketed by the caretaker.
As a landlord, you do your best to choose the right tenants and for your rental property with thorough screening processes and income requirements. However, even if you’ve determined that a person is a good fit for your property, there’s always a chance that your tenant is willing to perform illegal actions for their own benefit - such as theft. There are many different ways a tenant can commit theft on a rental property. Tenant theft can be spotted both through the course of the lease and at the end of it, or even during the move-out process. Tenant vandalism has become rampant and a menace in the real estate sector. Vandalism may depend on the neighborhood, geographical area and crime rate amongst other factors.
Below are some of the ways tenants steal from landlords.
1. Removing and reselling of apartment accessories and fixtures - a tenant may be tempted to replace high end accessories that the landlord had installed at their own dime and replace them with sub-standard ones. The high-end accessories end up fetching good money in the market.
2. Tenants can forge bank receipts and even re-use previous receipts and lie to the landlord that they have paid the rent. This usually buys the tenant some time, especially when the landlord is too busy to verify each tenant’s claims.
3. Tenants using bouncing checks - the tenant can write a cheque knowing very well he/she doesn’t have the money in the account and thus when the cheque is brought forth it bounces a few days later thus causing the landlord to incur penalties and at the end of the day the landlord still won’t have the money.
4. Falsify bank/Mpesa messages - For tenants who pay their rent via banks or mobile apps and are required to present the message or receipt to the caretaker at the end of the month as proof of rent payment, instances have been reported where these messages and receipts are falsified and reused yet the tenant has not actually paid for the rent.
5. Subleasing a property to a new third party. This can be termed as making money off one’s property. Though it is not illegal, as long as it’s allowed within the terms of your lease. The rental scam exists when a tenant subleases their property to a third party without notifying the landlord. The tenant will collect months of payment upfront from the third party and never transfer those funds to the landlord. By the time a landlord attempts to collect the payments, there is a new tenant in the property who’s already paid their rent to the leaseholder, though this is not a direct form of theft, it can still be considered as theft.
Solutions
To help reduce some of these problems, many landlords and property managers are turning to technology by using rental management software. Rental management software can help you with tenant payment processing so you don’t have to worry about forged receipts or messages. To learn more about other ways a rental management system can help you, please visit https://www.bomahut.com
We here at BOMAHUT offer solutions and advice on technology and real estate. Follow us on our social media platforms to learn more. For more information visit our website, https://www.bomahut.com.
Book a demo with us to learn how Bomahut can help you improve rent collection and save time on property management tasks.
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