9 Red Flags to Help Millennials Spot Rental Scams
For a generation that prides themselves on being tech-savvy, many millennials struggle to recognize online rental fraud. Traditionally, older people are primary targets for common fraudulent activities such as health insurance and telemarketing scams. However, when it comes to rental scams, younger generations seem to suffer the most. About 9.1% of younger renters lost money from a rental scam, which is higher than the respective percentage for all renters - 6,4%. Younger people tend to move often and be more budget-conscious, oftentimes having to sign a lease prior to seeing a rental unit, which makes them perfect victims to rental scammers. While scam artists keep getting more creative, there are certain red flags that can help millennial renters spot and avoid rental scams:
1. Rental prices that seem too good to be true
Millennials are usually money-conscious, as most have lots of student debt to pay off, or they want to live in some of the most expensive cities in the US. But be realistic. If you see a listing for a rental property featuring the latest amenities and priced way below the average market rate for a similar unit, it’s likely a scam. To avoid being cheated out of your money, make sure to study up on the market where you are searching. You can find median prices for different apartment sizes in our monthly rent reports.
2. The landlord or the owner is on vacation
A very common type of rental scams is when a person that listed a property tells you that they are traveling and can’t show you the unit. They might offer to lower your rent for your inconvenience, making the offer even more enticing. If you are already living in the city where you plan to move, never sign a lease before seeing a rental unit in person. If you live too far away to view the apartment yourself, have a friend tour it for you. If neither of these options work, then take extra care to make sure you are working with a legitimate landlord.
3. There are too many grammar mistakes in the listing
Bad grammar doesn’t automatically make a listing fraudulent. However, it should make you suspicious. Oftentimes, scammers don’t even live in the U.S., so they might also use uncommon spellings of words or unusual phrases. When you spot those, proceed with caution.
4. There is no address and/or photos in the listing
This is a huge red flag. If a person posting a listing doesn’t go into detail about the property, it should be suspicious. Oftentimes, a scam artist will offer a ridiculously low price and ask for a security deposit or rental application fee before disclosing the exact location of the rental. They are aware that if you know the location, you can Google it, visit it in person or check it on other rental websites. Therefore, no matter how attractive the price is or how great the amenities sound, don’t pay or sign anything without doing your due diligence.
5. The landlord insists that you sign the lease or pay the deposit before seeing the apartment
Millennials often have to move for jobs and can’t always see rental units before signing a lease. This makes them perfect targets for rental fraud. If you easily give in to peer pressure, this one might be hard for you to resist. Scam artists are experts when it comes to hard sales techniques. They’ll tell you that the rental unit is super popular because of its location, amenities, price. It will be very tempting to agree to send a security deposit before seeing the place in person. The best way to avoid falling for this type of fraud is making it a hard rule to inspect a potential rental in person no matter what.
6. There is no tenant screening process
Being landlord is a business, and conducting credit and background checks are necessary to avoid potential problems with tenants, such as unpaid rent, damage to the property, etc. If a landlord or a property manager says there is no need for a credit check, it should make you suspicious. People with bad credit and criminal records are the most susceptible to this type of fraud.
7. The photos have MLS watermarks
One of the most common types of rental scams is when a person uses images of properties that are being sold. Those images usually have MLS watermarks, as they are stolen from an MLS database. In this case, you may even inspect the unit without anyone suspecting anything since you might be confused for a potential buyer.
8. The landlord is asking you to wire money or use an unprotected third-party payment service
Venmo, Google Wallet and other third-party payment services are becoming popular among millennials for everyday transactions. However, many forget that those services should only be used for payments between friends and family. They don’t offer any protection against fraud. For instance, even PayPal Goods exclude real estate transactions from their Buyer Protection program. The safest ways to pay rent are via checks and credit cards. You can cancel the payments in case your potential landlord is a scammer. Transferring money via PayPal, Venmo or Western Union is basically the same as handing over cash.
9. The ad has been on the listing website for a long time
It’s especially true if you are looking in a popular location. If a listing offering great amenities for a low price in a popular location stays on the website for more than a month, proceed with caution. Some con artists make money by collecting application fees and have no intention to rent out the unit.