Canada’s housing market is having a turbulent year—and residential landlords are feeling the ripple effects. In recent months, property owners have faced rising costs across the board, from maintenance and administration to mortgage renewals at higher rates. At the same time, tenants are being pushed to their financial limits, with many reporting having to make painful trade-offs over which bills their limited income can cover. Recent data from SingleKey shows that the average Canadian renter now spends nearly 40 per cent of their gross income on housing. For landlords, rental payments often cover mortgage obligations or serve as a primary income stream. Even a single missed payment can trigger a cascade of financial strain.

Why is rental fraud on the rise?

While there’s always some level of risk with investments, owning a rental property has historically been seen as a safe, secure way to generate income. The rise in rental frauds today largely stems from the financial burdens more Canadians are feeling due to higher cost of living, low affordability in major city centres, and job insecurity.

Young Canadians, who make up a large portion of renters, are under particular strain. According to Equifax Canada, millennials and Gen Z saw their average non-mortgage debt rise by 2 per cent in Q2 of 2025 compared to the year before. Nearly 1 in 4 renters is under the age of 34. While a single-digit increase may not seem like much, job uncertainty or even unemployment for young workers can severely diminish available cash to cover basic needs, emergencies, existing debts, and housing.

Despite rent prices declining over the last few months, rental prices are near crisis territory and are already there for large city centres. SingleKey’s rental application data reveals that the average Canadian tenant spends 37 per cent of their income on rent, well above the recommended 30 per cent threshold. Tenants are paying even more in major cities like Vancouver (37.46%), Calgary (39.76%) and Toronto (41.12).

Types of rental scams

Whether incidental or deliberate, missed rent payments can pose a huge risk to a landlord’s income. Tenants who repeatedly fail to pay their rent end up taking landlords down a long and difficult eviction process, costing the average landlord four to eight months of rental income. Overpayment schemes, on the other hand, are deliberate. They typically involve tenants submitting incorrect banking details or claiming to have overpaid—prompting landlords to issue a refund and prolonging the payment process. In other cases, scammers have sent eTransfer requests designed to look like incoming rent. If a landlord accepts, thinking it’s a deposit, the funds are actually withdrawn. While less common, these types of tactics can pose real challenges—especially for landlords managing properties solo or without protective systems in place.

Mitigating fraud

Mitigating the risk of rental scams starts when screening for potential tenants. While it might be tempting to combat the risk of scams through more stringent screening processes, holding tenants to the traditional 30 per cent rent-to-income cut-off isn’t realistic. In the current economic conditions, tenants will ultimately be putting more income towards rent. With rising vacancies, an overly strict approach not grounded in the realities of the current market can see you miss out on rental income altogether.

While rent-to-income models are an important factor to assess, there are a variety of metrics that can measure a tenant’s financial situation and whether they’d be equipped to withstand any additional financial burden.

Key metrics for evaluating a tenant:

• Credit Score

Monitor tenant credit scores by looking at the credit rating and the number of inquiries made. Excessive inquiries can indicate a tenant is wary of their own financial standing.

• Eviction Records

Eviction Records are publicly available data, and they are crucial for determining if a tenant has been evicted before and why.

• Payment History

In the grand scheme, one missed cell phone payment is not much, but missed car loan payments or repeated missed credit card payments can be an indicator of a higher-risk tenant.

• Employment History

A snapshot of a tenant’s current and past employment to determine if they can consistently generate income to meet payment obligations.

• Debt-to-Income Ratio

A comparison of a tenant’s debt to their income determines whether they are taking on too much debt in their personal finances, making rental payments more challenging to meet on a recurring basis.

What’s the solution?

One of the main reasons why rental scams are so prevalent and impactful is the lack of safeguards and standardized processes within the rental market. For investments like houses and cars, owners are required to have insurance. Rental income should also have “trust infrastructures” in place to reduce risk and increase transparency in the tenant-landlord relationship. Examples include:

• Standardized screening platforms that verify income, credit, and identity data
• Automated rent collection systems that confirm legitimate payments
• Rent guarantee programs that insure the landlord against missed payments

By embracing modern screening practices and adopting trust infrastructures, landlords can move from being reactive to proactive in their approach to filling vacancies. These safeguards aren’t about distrusting tenants; they’re about creating a fair and transparent process for both parties.

Viler Lika is the founder and CEO of SingleKey, Canada’s leading rental risk intelligence platform.