Meet Karl Rikki Castillo. Every Landlord’s worst nightmare. The Tenant Who Was Never Going to Pay Rent

Scam tenant Karl Rikki Castillo is a serial scammer that has ripped off countless landlords.

The scam is quite simple. Karl will find a property he wants to move into.

- Karl Rikki Castillo will dress the part.
- Karl will look smart.
- Karl will talk about how important he is.
- Karl will talk about how important the people he knows are.
- Karl will they to charm and negotiate the rental terms.

- Castillo may even try to apply to rent the property in another name, or use his wife or son's names to create a fresh tenancy application history.

- Karl Castillo will then tell the landlord or managing agent that he set up a new company or new bank account and that there is some delay opening the new account.

- Karl Castillo will then tell the landlord that he can pay him upfront in cash instead to cover the deposit and the first 4 to 6 months. That, my friend, will be the last payment that the landlord ever sees from scam tenant Karl Castillo. Karl will never make another rental payment to the landlord again.

- Next the landlord will be forced to go through the lengthy, time consuming and expensive eviction process to get Karl Castillo out while Karl lives rent-free, while you the landlord foot the bill.

- During this time, Karl Castillo, the tenant, will make it as difficult as possible for you the landlord to get him out.

- At various stages of the eviction process Karl Castillo will make all sorts of promises of payment to the Landlord that he will never keep.

- While written in future tense, Karl Castillo has already done this countless times to landlords

To avoid this scam, ensure you vet Karl Castillo as prospective tenant properly, put all rental payments on direct debit and have sufficient money upfront and break clauses to protect yourself from being scammed by a bad tenant.

While a rental applicant like Karl who offers to pay in cash may seem like the dream tenant, in reality, cash payments are a big red flag.

Rather than streamlining the leasing process, a landlord needs to use extra vigilance when screening prospective applicants like Karl Castillo.

Here are four reasons to scrutinise tenants who offer to pay in cash:

1. A common reason that tenants like Karl Castillo offer cash is that they have bad credit.

Offering to pay in cash — especially paying in advance — earns that applicant a pass on a tenant credit check.

The landlord won’t know this person’s true financial situation for several weeks — and by then it’s too late to avoid income loss. If this person is not relying on continuing income or investments to pay rent, what happens when the cash runs out?

2. There is no good way to verify whether the cash the tenant is offering was obtained legally or whether the tenant has legal income.

Offering cash is the calling card of a tenant who is involved in criminal activity or running a scam. That puts the property — and the landlord — at risk.

3. Accepting cash eliminates the ability to see information on cheques — address, phone, bank — that may not match with government ID, rental application, or previous cheques.

4. Handling cash creates unnecessary risks and attracts crime.

Landlords and Leasing agents who accept cash payments need to take special precautions to avoid being targeted by thieves. This can increase a landlord’s costs. Renters who pay cash may suffer the same risks.

5. Accepting cash also exposes the landlord to false claims that the rent was paid.

While there are tenants who may rely on savings or choose not to use banks, these cases are outside the mainstream and a landlord must exercise due diligence to avoid scammers.

For instance, if the person is claiming to be so wealthy they carry that kind of cash in their wallet, does it make sense that they’d be renting the specific property?

Can they provide any proof of funds along with a photo ID? Does that information track with the tenant credit check?

An applicant who has sufficient income to pay rent is going to be able to substantiate that with documentation, whether it’s a letter outlining benefits from government assistance, pay stubs, automatic deposit records, trust disbursement records, or a savings account statement.

Anyone who can’t provide a proper paper trail is telling stories.

So, if you're a landlord considering renting a home to Karl Castillo or similar types, it is crucial to run an extensive tenant credit check. Otherwise, it may not be possible to catch someone who is using a fake identity or mis-stating income.

Even a seemingly wealthy applicant that talks the part may have a history of not paying bills on time. The risk of tenant fraud is too great to take someone’s word for it.

Landlords beware of Karl Rikki Castillo!