Rent payments down, fraud up, say multifamily landlords
Landlords say that more than half of their tenants are having trouble making rent, according to new data from real estate tech company Snappt.
According to Snappt’s 2020 Effects of the COVID-19 Pandemic on Residential Rentals survey, 53% of residential tenants are struggling to pay their housing costs, mostly due to the economic fallout from the pandemic. A quarter of people are paying late, while 17% now pay less than full rent, and 11% have stopped paying at all. This is also driving a 75% increase in evictions, with a current eviction rate of 21%.
“Many of these evictions are awaiting the expiration of moratoriums, with the typical building having 15 evictions stacked up,” Snappt said in an email to MPA.
Twenty-five percent of these evictions are associated with application fraud, which has increased dramatically in the wake of COVID-19, according to Snappt.
“The survey shows that nearly a third of applications now exhibit application fraud,” said Daniel Berlind, co-founder and CEO of Snappt. “That represents a nearly doubling since the pandemic hit.”
Eighty-five percent of property managers reported that they had been a victim of application fraud, up from 66% last year. And the fraudsters are getting slicker; pre-pandemic property managers felt
that only one in 10 fraudulently altered rental applications slipped by undetected. They now say that one in four fraudulent applications escape detection.
“With the increase in tenants not able to pay rent and increase in application fraud, the COVID-19 pandemic has cost the typical building $71,500 since March,” Snappt said.