If you’re looking for an apartment, the last thing you want is to fall victim to a rental scam. Scam artists like to take advantage of prospective tenants because emotions involved in the apartment-hunting process can make people more vulnerable.
For instance, if you’re feeling excitement and enthusiasm about finding a new home, your eagerness might make you more trusting. Scam artists also prey on apartment hunters who are in a time crunch (because of a job relocation or personal issue, for example) and are desperate to find a new place as soon as possible.
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Fortunately, there are ways apartment hunters can lower the likelihood of getting caught up in a rental scam. Here’s what you should keep in mind when you’re looking for the perfect rental:
What Is a Rental Scam?
Rental scams are a variation on a theme. The scammer tries to get money from a prospective tenant for an apartment that the scammer is in no legal position to rent.
The apartment might be real (in which case, the scammer doesn’t have the authority to lease it) or fictitious. The scammer could be a real landlord or, more likely, an impostor.
Scammers typically try to get money from unsuspecting apartment hunters, then disappear. For example, a tenant who’s vacating his apartment might decide to show it, pretending to be the landlord. He might lead all prospects to believe they’re getting that apartment and collect fees and security deposits upfront. Once the prospects realize they’ve been scammed, the scammer has usually vanished with their money.
How Rental Scams Work?
Scammers prey on desperate or trusting renters who want to take advantage of a too-good-to-be-true rent price by presenting a vacancy ad on reputable rental listing sites and asking for security deposits and first month’s rent in exchange for keys. Once the scammer secures the money, they disappear, and the tenant is left with a lighter wallet and still no place to live.
Scammers create rental ads with real or fake information about homes that have been previously listed for rent or are up for sale. Template-like emails are exchanged between a prospective tenant and the “owner” or “landlord” claiming they are out of town for a job or overseas for missionary work.
The scammer will typically present a long story about why a home is for rent and avoid responding to detailed questions from the prospect. Despite attempts to see the property, the scammer will explain that the home must rent site-unseen due to their current long-distance living situation. The scam continues by agreeing to provide the prospect with keys once a wire transfer has been made for the security deposit and first month’s rent.
Wire transfers through companies like Western Union or MoneyGram are untraceable and non-refundable, which is why they are preferred by scammers and should be a HUGE red flag to prospects.
Rental scammers try to include detail, mention lawyers or agents and added security measures, like address verification, to build trust and authority with their victim. At the same time, they remain vague and distant about property specifics or reasons for not accepting alternative forms of payment.
Some scams are cookie cutter with the same property being posted at multiple locations around the country and the exact same emails being sent to prospects.
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How Can You Tell If a Rental Property Listing Is a Scam?
They Don’t Want to Meet You in Person
It’s not a good sign if the person who replies to your listing says he or she is out of town and cannot meet you. Some scammers even lie and say they are in the military to avoid setting up a time to meet you in person.
A good landlord will make sure that they meet you since renting to someone is a big decision that requires trusting a person will follow the rules in the lease. If a landlord is renting out a property themselves, they should want to meet you in person to make sure you’re legitimate. On the flip side, scammers typically don’t want to meet you, since they don’t want you to be able to report them.
They Want You to Move in Immediately, Without Ever Seeing the Property
Even if you meet someone in person who claims to be the landlord, you should absolutely see the property before signing a lease or sending money. It’s easy for someone to say they have a property and fake an online listing, so you need to see the property in person and make sure the place is available.
In most rental scams, the individual advertising the property doesn’t actually have any way to access the inside of the property. If a landlord instructs you to inspect the property by walking around the outside at your convenience, this is almost certainly a scam.
If you are in the unfortunate position of needing a place immediately, be extra careful. Properties that are available right away are likely either scams or the sign of a disorganized landlord.
They Ask You to Mail or Wire Money
Scammers will ask for money upfront. You should never pay a landlord any money until after you’ve signed a lease.
Some scammers will provide victims with a story about being overseas, sometimes for work or even to care for an ill relative. Because they are overseas, you will be instructed to wire the money to them with a promise that they will mail you the keys to the property.
You should never wire money to anyone you meet online. If anyone you meet online asks you to wire him or her money, report the listing as fraudulent and cease all communications.
The Price is Too Good
Whenever you see a price that looks too good to be true, it probably is. A property that is priced below the going market rate in your area should be an immediate red flag.
How can you determine the fair market value?
- Do your own research on the rent in the area that you’re looking for. To understand what market rates are, you should look at properties that are comparable in location, size and amenities.
- Look at the Zillow Rent Zestimate for the property that you’re interested in. The easiest way to find the Rent Zestimate is by typing the property address into Zillow. For most properties, Zillow will display an estimated monthly rent price for your target property.
While an asking rent amount below market is a sign of potential fraud, it doesn’t mean that the listing is fraudulent. Keep in mind that the property owner may not know the fair market rent rate, they might be renting the unit in the off-peak season, or the unit is flawed in some way (near a noisy highway, for example).
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The Listing Has Typos, Poor Grammar or Excessive Punctuation
Beware of rental listings that are full of errors. Serious landlords or property managers will take the time to write a decent listing. If you come across a rental listing that is full of typos, poor grammar, and excessive punctuation, there’s a high chance a scammer created it.
There Is No Screening Process
As a tenant, you’ll want to rent from a high-quality, responsive landlord who does things the “right” way. Professional landlords always have a set screening process that they follow to ensure they choose quality tenants.
If a landlord does not require a rental application and credit check, you should consider this a red flag. The landlord is either unconcerned about picking a good tenant because it’s a scam, or unconcerned. After all, they are inexperienced. In both scenarios, you should be a bit suspicious.
A landlord who aims to scam you will always insist on paying cash and will simply move on to the next prospect if you refuse.
Always remember that such things as a security deposit and paying the last month upfront should never involve cash, wire transfers. They are constantly becoming a part of rental scams.
Never Rent Without Having A Look At The Actual Place
Having a chance to look at the place you plan to rent should be the number one priority for you, and once this requirement is not met, you can skip that landlord.
Any landlord who is really planning to rent out the place is ready to show it and confirm that it actually looks like the pictures he provided on the website. Schedule the open house visit and evaluate the real property condition.
This also goes to those who are trying to rent a place in the other city while working on the relocation process. Even in this situation you should ensure that your friend, family member or your trustee pays a visit to the landlord’s unit and takes a look at it.
Even though there are lots of scammers who have access to the property, insisting on a house tour is a huge step towards a more transparent rental process.
Always Sign A Written Lease
The only form of lease that you should consider is a written one. We have already discussed the verbal agreement in one of our previous posts, make sure you check it out it’s a few minutes read. This is simple: even though some states allow oral agreements (for example, Maryland), there is always a chance that you’ll have to take this case to court and this will become a real headache for you, all these cases are really hard to resolve.
All lease contracts should be signed by both parties: a homeowner and a tenant.
If you decide to deal with a physically existing contract, you’ll have to make sure:
- That landlord’s sign is there to (the best way to achieve that is signing the lease in the presence of each other right after you decide to rent the house)
- That you get a copy of this contract, not only the landlord
Expert tip: You can eSign the rental agreement with a landlord through Rentberry and forget about faxing and running around the city with the paper contract. We store your contracts in your profile with the highest level of encryption and all the needed security measures. Learn how to eSign your lease with Rentberry.
These two basic rules should make life much easier and safer for you, but there is one more thing I want to review closer regarding the contract.
Identify The Owner Of The Property
Before going ahead and signing the lease agreement, you should ask for the homeownership documents that prove that you’re dealing with a person who has all the rights to rent out this place. This will help you understand that this whole deal is legit.
Avoid anyone who’s telling you that the documents will be sent to you later, and a real homeowner doesn’t have any reasons to avoid showing you the documents.
When you see the ownership documents and the name, it doesn’t match with the name of the landlord, and there is nothing to do here.
Make Sure Your Lease Identifies The Owner As Well
Your lease agreement should include the actual homeowner name in order to ensure that the house is rented out legally. Anyone who is trying to personate a trustee or says that he’s working on behalf of the owner should have the corresponding documents proving this fact.
This, by the way, also goes to the situations where the documents state that this house has two owners, cause, in this case, you should ask for a written confirmation from the second owner that he is aware of the rental process and approves the rental agreement.
Sub-leasing Is Not A Great Idea
Sub-leasing can be the shakiest and the most dangerous thing you can get yourself into. Checking whether the original tenant has the rights to sub-lease the place is unbelievably hard, and you can never be sure that everything is alright and you’re not becoming a part of rental scams there.
The most interesting thing about subleasing is that both you and the original tenant cannot feel secure about it due to the original agreement and the fact that the landlord can evict both of you if the original contract forbids the sub-lease.
The best way to avoid the problems with the sub-leasing is to talk to the original tenant and work with him on adding your name to the original agreement.
Expert tip: It’s really convenient to split your rent with a roommate; just do it the smart way.
Meet Your Landlord In Person
Yes, we are the online platform that makes it possible to eSign the lease, pay rent and collect rent online and even schedule the house tour online. However, once the tour is scheduled and you come to see the apartment, you should meet the actual landlord, the homeowner, the person who has all the rights to rent out this place to you.
Any landlord who is a potential scammer will avoid a chance to show you a place, skip any kind of real interaction, including the property tours and agreement signing that legitimate landlords usually prefer. Paying rent online is a foolproof way to protect yourself from scams, and you can do this with Rentberry. Sign up with us today and use its security for a better rental experience.
Beware Of The Middleman Scam
The middleman scam is one of the most common schemes out there, especially on websites like Craigslist and other platforms with classifieds.
So you ran into this juicy ad of a place that looks amazing, and the price looks reasonable. You call there, and this person tells you that he/she is the one who handles or manages this place for the real owners.
Typically the place is real, but they don’t have access to it. They find this place on the other real-estate platform, take the pictures and description and place all this info into the Craigslist ad. They insist on collecting rental payment, security deposit and other payments that can be gathered in the first place and then they simply run away with your money.
Rental frauds on Craigslist are living there like in heaven. According to the study called ‘Understanding Craigslist Rental Scams’, in total there were about 29K scam listings detected over the 20 cities they monitored, within a period of 141 days. This is a hell of a number, so try to avoid the middleman services from shady ‘managers’.
Ploys used by scammers to steal rent money:
- Renting with the intent of renting to others. This scam works just how it sounds. A scam artist rents a property so they can show it to other prospective renters. They’ll collect first and last month’s rent, security deposits and any fees or charges they can squeeze out of their victims before skipping town with the loot. There have been reports of a single property being leased or rented to dozens of people before the crook vanished with their money.
- Renting on behalf of the owner. This scam is similar to the previous one, but there’s one major difference: the scam artist claims to be helping someone else rent the property. They might be sick, or overseas, or just too busy to do it themselves for whatever reason. Once the scammer collects first, last, deposits and fees they skip town. The renter then discovers the home wasn’t for rent. The owners or renters may have been away for business or pleasure, or it’s a vacation home, or it could be a foreclosed property. Either way, you’re out the money if you fall for it.
- Nigerian Rental Scams. This scam is a variation of the two previous scams but differs in that it takes place on the internet and the scammer doesn’t need to be present and may never have been to the property. This scam is especially dangerous because it targets both property owners and renters. One flavour of this scam involves a crook finding a photo of a property and its address then posting them on Craigslist or other online rental websites hoping someone will be willing to wire them the first and last month’s rent, security deposits, and miscellaneous fees (Sound familiar?). If you think no one falls for this, guess again. People are generally quite trusting, and the ad will be so enticing that the potential renters will believe they are getting a bargain. A variation of this scam is the classic Nigerian 419 scam. Someone will answer an online posting for a property and ask to pay by Western Union or an equivalent money wiring service. If the landlord takes the bait, and many do, the renter will “accidentally” pay too much. The renter will apologize and ask for the extra funds to be sent back to them. If the landlord doesn’t wait for the payment to clear the bank and sends the money, they’re out whatever they send. That’s the scam, and it’s very successful.
To help protect the industry, report any listing that you come across that presents red flags of a potential scam. Add watermarks or your business’s brand to images of your rental property so deter scammers from using your property’s photos in their scams. Always screen your tenants to verify an applicant’s identity and reduce your potential risks. And always wait for a check to clear before refunding overpayment or handing over the keys.
Make sure you are working with reputable companies that actively monitor their website’s content to prevent fraudulent postings. If your property management software posts your vacancies to a rental listing syndication network, you should be confident that they are combating listing fraud to protect your properties and the industry.
The best way to avoid a scam is to see the apartment in person and meet the landlord before you move forward with any part of the application process. Plus, it’s an important step in your search for an apartment — you want to find a place to live that meets your needs.