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How To Avoid Rental Scams

How To Avoid Rental Scams

With so much demand for housing and such scarce availability, the thought of looking for a new home right now is daunting to many. Unfortunately, scammers have taken note of this opportunity to swindle desperate homebuyers and renters out of their hard-earned money.

We’ve been made aware of the following types of scams. Note that there are many variations of scams out there, but they are a similar in that the scammer poses as the legitimate owner or property manager:

  • Rent-to-own scams where a purported property owner collects rent and signs a contract stating that the occupant will own the home after a certain number of payments, only to disappear once the final payment is made. Typically at this point, the actual property owner has commenced eviction proceedings against the occupant and all the money paid to the scammer is worth nothing since the owner never received it. The scammers use untraceable phone numbers and make themselves difficult to find, possibly relocating to different localities for each round of scam-artistry.  
  • Rental listing hijacking/middleman scams where a scammer steals listing photos from a legitimate rental listing and re-posts them on rental sites, often at a steal of a price. When they do this, they are enticing potential applicants to contact them at a super attractive rental rate. They will then ask for money up front from the applicant without allowing them to see the rental property. Sometimes they will even schedule showings at the property and then act like they don’t have the right keys on them to access the property. In either scenario, they will demand money up front for fake application fees and deposits, and then they will disappear. In other cases, they will ask for personal information with the intention of stealing the applicant’s identity, since applications typically require sensitive personal data such as driver’s licenses and social security numbers.

Tips for Renters:

  • When looking at a listing, look for watermarks on the photos. Savvy landlords whose listings have been hijacked in the past may put watermarks/logos on their photos for this very reason. If the watermarks match up with the management company information listed in the ad, that is a great sign.
  • Be wary of landlords seeking money up front without applying for the property or even seeing it first.
    • You should only pay an application fee when completing the application itself. When applying, ask the agent when you can expect to hear back. Try to verify their information as legitimate real estate professionals. Look them up online to make sure they are legally conducting business in the area.
    • You should only pay a deposit when you have been officially approved for the rental, have seen it (or if renting site unseen, are satisfied with photos/videos of the property you’ve requested and other details confirmed to verify that the deal is legitimate) and have a lease presented to you for signature.
    • Pay using a method that is traceable. Request receipts.
    • If a supposed landlord is trying to approve you with no application or background information, it is probably a scam. Even mom-and-pop landlords conduct background checks.
    • Verify that the rental rate is in line with comparable properties. If it seems too good to be true, it probably is.
    • Try to meet the landlord or agent in person. While an in-person showing is not always possible, you should take steps to make sure you are dealing with a legitimate organization. Does the management company have an office you can visit, for example?
    • Ask for references from the landlord. While this request may not always be honored, it’s worth a shot.
    • Read the lease carefully. Do not agree to an oral lease. Request copies and make sure the owner of the property is named on the lease.

Tips for Landlords:

  • Be open to providing verification that you are the owner or agent.
  • Be open to providing rental references from previous tenants when requested and understand that prospective tenants are simply looking to make a sound rental decision when requesting more information.
  • Take steps to protect your own listings by using watermarked photos and logos.
  • Be sure to follow the same process for every single applicant to demonstrate consistency.
  • Take applicants’ concerns seriously.

The biggest tip to remember is that if it seems too good to be true, it likely is. You may find clues that the person you’re working with is a scammer if you spot poor grammar and spelling or strange-sounding phrases; an unnecessarily strong sense of urgency; being ghosted after making a payment; inconsistent information when attempting to verify the owner/agent for the property; lack of details on the rental; inability to view the home prior to leasing it.

We understand that it can be tough to find a rental out there, but we encourage you to have patience and to conduct your own due diligence during this process.

We hope this article has provided some helpful tips during your apartment or rental home search!