Why agents are the front line in fighting rental fraud

The single-family rental (SFR) market is no longer a niche corner of real estate. It now makes up a significant share of the rental housing sector, fueled by years of steady growth. While institutional investors have entered the space with purpose-built communities and large portfolios, the majority of these properties are still owned by individual landlords. This mix of ownership creates both opportunities and responsibilities for real estate agents.

Agents are often the bridge between landlords and renters, which means they are uniquely positioned to protect both sides from costly mistakes. Doing so requires more than simply filling vacancies, it demands awareness, diligence, and up-to-date education on fraud prevention and compliance.

Fraud is a growing concern in rentals, and it impacts landlords of all sizes. A recent NMHC Pulse Survey found that 93 percent of landlords have come across fraudulent tenant documents, with 84 percent detecting false income or employment claims. Losses can range from $1,000 to $5,000 per fraudulent tenant. Snappt reports that 6.4 percent of all rental applications in 2024 contained manipulated documents with over 80,000 fraudulent files in just one year.

These numbers show why agents can’t rely on outdated screening methods or assume fraud is only a problem for large operators. While big players like Invitation Homes and Progress Residential use AI-powered verification and document authentication at scale, more than 80 percent of SFR properties are still in the hands of small landlords, many of whom lean on their agents for guidance and protection.

The risks don’t stop with applications. Fake listings have surged, leading to a 45 percent increase in rental scam complaints to the FTC and Better Business Bureau over the past two years. Victims often lose security deposits or first-month rent payments before realizing they’ve been duped. Nearly half lose $1,000 or more, and 8 percent lose over $5,000.

For agents, the takeaway is clear: knowing how to spot fraud and educate clients on prevention can be a real value-add. Using advanced screening tools with ID verification, document authentication, and income validation not only safeguards landlords but also ensures legitimate renters aren’t wrongfully excluded. That’s why educational materials are essential to help agents learn all about the technology that can make their business better. Balancing thorough screening with fair access is also critical, especially for the 45 million “credit invisible” people in the U.S. who could qualify for housing if alternative data like utility and telecom payments were considered.

By staying informed, following best practices, and committing to ongoing education, agents can play a central role in making the SFR market more secure and fair. When agents take the lead on compliance and fraud prevention, they don’t just close deals but they help protect their clients’ investments, safeguard renters from scams, and strengthen trust across the rental industry.

Michael Lucarelli is the CEO of RentSpree.

This column does not necessarily reflect the opinion of HousingWire’s editorial department and its owners.

To contact the editor responsible for this piece: zeb@hwmedia.com.