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How to Spot and Avoid Rental Scams

March 22, 2019

Finding a nice affordable apartment in a great location is not the easiest of tasks. It requires a lot of time and effort and can be pretty overwhelming. There are always people out there ready to take advantage of you when you are confused and, therefore, vulnerable. When looking for their next apartments, renters share sensitive information and pay a lot of money upfront, which can be tempting for scammers. According to a recent report published by our research team, an estimated 43.1% of renters have encountered a listing they suspected was fraudulent, and a whopping 5.2 million U.S. renters have lost money from rental fraud. To help you avoid becoming another victim of rental scammers, we put together this guide with tips on spotting and avoiding rental scams.

What are rental scams
Types of rental scams
[Red flags to help you identify a rental scam](#Red flags to help you identify a rental scam)[
](#Red flags to help you identify a rental scam)Things to do to avoid rental scams

What are rental scams

A rental scam is a fraudulent activity by a person who claims to rent a property that isn’t their rental, doesn’t exist, or is their rental but is different from what’s advertised. The main goal of rental scam-artists is to collect money in the form of application fees, pet fees, security deposits and rent from a prospective tenant without providing the advertised rental property. To avoid rental scams, you have to know red flags to watch out for when looking for an apartment.

Types of rental scams

  1. Forever Vacant. A scammer shows an apartment to prospective renters, collects application fees and never rents it out. Some of those properties can be on the market for years without ever being rented. In fact, oftentimes the con-artist rents the property himself.
  2. Phantom Rentals. A fraudster creates fake listings for places that don’t exist or aren’t for rent.
  3. Bait-and-Switch. A property advertised is not the same property that the victim is signing a lease for. Sometimes victims are even shown the apartment, but it’s different from the one stated in their contract.
  4. Hijacked Ads. A fake landlord posts advertisements for a real property with altered contact information. Homes for sale are often re-listed as rentals in this type of fraud.
  5. Already Leased. A scammer collects application fees and/or security deposits for a rental property that is already leased.
  6. Missing Amenities. A real rental property is advertised as having amenities it lacks in order to collect higher rent. The landlord attempts to get renters to sign the lease agreement before they notice the missing amenities.

Red flags to help you identify a rental scam

  1. The person who posted a listing is away on a business trip or vacation abroad. This is a very common type of fraud. A person tells you they are out of the country and can’t show you an apartment. They’ll offer a lower rent for your inconveniences, they might also send you fake keys, as long as you pay that security deposit before signing a lease.
  2. The price is too good to be true. You find THE perfect rental - in a great location and with upgraded amenities. And the best part? It’s significantly cheaper than any other apartments in the area. Great deal? Sorry to disappoint you, but it’s likely a scam.
  3. The listing contains too many grammatical errors or uncommon spellings of words. If they use the word “theatre” instead of “theater”, it doesn’t necessarily mean that the listing is fake. However, we would advise you to proceed with caution.
  4. Listing lacks details such as an address or photos of the property. Why would you pay big bucks for something you haven’t inspected beforehand anyway? Scammers know well that you can verify the rental by simply searching it on Google Maps and other rental websites. Put some effort into verifying listings to avoid rental scams.
  5. There is no background check and credit checks. The lack of a screening process should make you suspicious. In this type of rental scam, fraudsters target people with criminal records and bad credit who struggle to find an apartment.
  6. The ad stays on the website for over a month. If you are searching for an apartment rental in a popular area and see the same listing for over a month, be careful. It might be a scam to collect application fees from as many people as possible.
  7. The landlord or real estate agent asks you to wire money or use unprotected third-party services. They can ask you to transfer money via Western Union, Venmo or PayPal. Wire transfers are essentially the same as giving them cash.
  8. They want you to sign a lease or pay a deposit before seeing an apartment. They’ll be using hard selling techniques and saying that the rental is very popular, and there are a lot of potential applicants.
  9. The images have copyright or MLS watermarks. If you see the former, make sure to verify the listing by calling the company that owns the rights to the photo. If there is an MLS watermark, the photo is likely to have been stolen from an MLS database.

Things to do to avoid rental scams

  1. Do your due diligence and study up on your local rental market, check prices for similar apartments in the same neighborhood. If it looks too good to be true, it probably is.
  2. If you find listings for the same rental on various sites, make sure the contact information is the same.
  3. Be wary of rentals that don’t ask about credit report and don’t mention background check.
  4. Always verify if the property is legitimate before paying a deposit to avoid becoming a victim of a rental scam.
  5. If the listing doesn’t have an address, ask for it and verify it by using Google Maps.
  6. Never sign anything before seeing a place in person.
  7. Don’t pay a security deposit or first month’s rent before you’ve signed a lease.
  8. Before or after the viewing, talk to neighbors and ask if the person showing the unit is the legitimate landlord. Ask how long have the unit been vacant for.
  9. To avoid rental scams, never give your social security number or bank account information prior to verifying the legitimacy of the person in front of you.
  10. Don’t give cash, wire money or use services like Venmo or Paypal. A scammer might tell you that PayPal Goods is safe for business transactions, unlike PayPal Friends and Family. But they often forget to mention that PayPal’s Buyer Protection doesn’t cover real estate transactions. Use checks or credit cards instead.
By: Sania Tran
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