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As scammers hijack the rental market, landlords are left paying the price โ€” 5 safer ways to invest in real estate
Yahoo Financeยท 2025-10-26 12:00
Core Insights - The rental market is facing significant challenges due to an increase in rental fraud, with reports indicating that up to 50% of rental applications in some areas show signs of fraud [1][4] - A survey by the National Multifamily Housing Council revealed that 93% of property managers experienced fraud in the past year, highlighting the widespread nature of the issue [1][2] - The rise in scams is contributing to higher costs for landlords, who are forced to cover lost rent and legal fees, leading to increased rental prices for tenants [5][6] Industry Challenges - The shift to online rental processes during the pandemic has made it easier for fraudsters to exploit vulnerabilities, such as faking documents [1][4] - Property managers are now implementing stricter screening processes, which may include longer applications and more verification steps, complicating the rental process for legitimate applicants [6] Investment Opportunities - Real estate crowdfunding platforms like Fundrise allow investors to participate in real estate portfolios with low minimum investments, providing diversification without the headaches of direct ownership [8] - The Arrived Private Credit Fund offers opportunities for investing in short-term, property-backed loans with historical annualized dividends around 8% [9] - Fractional ownership platforms like Mogul enable investors to gain access to high-quality single-family rentals with reported internal rates of return near 18.8% [10] - Home equity investment options, such as Homeshare's U.S. Home Equity Fund, allow investors to tap into the estimated $34.9 trillion in home equity without direct property ownership [11] Commercial Real Estate Insights - Grocery-anchored shopping centers have shown resilience during the pandemic, maintaining high occupancy rates, which presents investment opportunities through specialized firms like First National Realty Partners [12][13]