By Nicky Budworth, Head of Coaches at Touchstone Education

Running a property portfolio means making business decisions every day, from assessing new investments and managing cash flow to keeping costs under control. Tenant selection is another of those decisions, but AI is making some of the risks involved much harder to spot.

It is now easy to create convincing payslips, references and other false information – anyone can do it, making it harder for landlords to establish whether prospective tenants are who they say they are and can genuinely afford the property. Recent research from Goodlord suggests tenant fraud could expose the private rental sector to as much as £4.1 billion in losses each year. Between July 2025 and June 2026, 41 in every 1,000 tenancy applications were reportedly flagged for suspected fraud.

For property businesses, these figures should be taken seriously. Fraudulent applications are nothing new, but what has changed is how easy it can be to produce convincing false information. What might once have required considerable technical knowledge can now be achieved using widely available tools, making it increasingly difficult to judge the authenticity of a document simply by looking at it.

The potential impact also goes beyond accepting an unsuitable tenant. Rental income is the lifeblood of most property businesses, and problems with payments can quickly affect cash flow, particularly for landlords with modest portfolios, managing mortgages and other costs across a relatively small number of properties. There can also be considerable time and expense involved in resolving problems once a tenancy has begun. This means tenant checks now need to be viewed as part of a landlord’s wider approach to managing business risk. Just as an SME might carry out checks before entering into an important agreement with a new customer or supplier, landlords need processes that give them confidence in the people they are entering into a tenancy with.

Part of that involves moving beyond a heavy reliance on paperwork. Payslips, bank statements, identification and references all have a role to play, but the information behind them should be verified wherever possible. The aim should be to build up a wider picture of the applicant and establish whether the different information provided is consistent.

Technology can form part of that process. Digital identity verification services can provide additional assurance that an applicant is who they claim to be, while Open Banking can, with an applicant’s consent, allow financial information to be securely accessed directly from their bank. This can help landlords or their referencing providers establish whether declared income is actually being received and develop a clearer picture of affordability.

Landlords don’t need to become fraud experts themselves. Tenant referencing and identity verification providers can carry out many of these checks on their behalf, which can be particularly useful for somebody managing a smaller portfolio alongside another job or business. More thorough checks may come at an additional cost, but that needs to be weighed against the potential cost of problems later in the tenancy.

The same thinking applies when a property is sitting empty. Every day without a tenant can mean lost income, so there is an understandable commercial incentive to move quickly. However, allowing that pressure to result in rushed checks could leave a landlord exposed to a much greater financial problem further down the line. Taking a little longer to properly verify an application can be far less costly than rushing into the wrong tenancy.

As a portfolio grows, consistency becomes increasingly important. Checks that might be manageable informally with one property become harder to keep on top of when there are multiple properties, tenants and applications involved. Having a clear process helps make sure the same checks are carried out every time and that nothing important gets missed.

That doesn’t mean treating every prospective tenant with suspicion. Most applicants will be genuine. It’s simply about checking that the information you’ve been given stacks up before making what is, ultimately, an important business decision.

The reality is that creating convincing fake documents is becoming easier, while spotting them by eye is becoming harder. For landlords, the answer isn’t to become more suspicious of tenants, but to get better at verifying the information they’re given. As AI develops, that is likely to become an increasingly important part of running a property portfolio well.