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Watch Out For These Rental Scams

Woman signs a contract and hands over money for her new rental. She took care not to fall for common rental scams.
ldutko / Getty Images

Whether you’re searching for a rental as a new home or a place to unwind during a vacation, not all listings you come across are legit. Thieves love to employ rental scams to try to steal your money. To help you avoid losing money, this article will help you identify the most common types of housing scams.

3 common housing scams to watch out for

Knowing the common types of housing scams can help learn how to spot a rental scammer. These are the three most common types of housing scams you might come across when trying to rent a home:

1. Fake listings

One of the more common housing rental scams involves scammers posting listings for properties they don’t own.

“When a listing is fake, the scammers will often take a legitimate listing and rip off the information,” says Seth Stephens, director of sales for Renters Warehouse in Seattle.

But scammers don’t stop there. In some cases, Stephens points out that the scammer will poach the listing and drop the price of the rent significantly.

“With this new fake listing, they post on a site like Craigslist, and they can flag to remove the original, legitimate listing,” Stephens says.

Those running the rental scams will even create fake email addresses using a real estate agent’s name from an agency website, to make the listing look legit. Would-be renters lose money because the fake landlord asks for money upfront, without the renter ever seeing the property or meeting the landlord at the property.

2. “The keys are in the mail”

You’ve been searching for weeks for a new rental house and finally, a listing appears that meets your criteria. The pictures in the listing showcase every room with detailed descriptions. Even better, it’s offered at a very reasonable price. It looks so perfect that you’re worried about losing it to someone else, so you email the owner and get a reply immediately!

Unfortunately, the “landlord” just so happens to be out of the country and can’t show you the property at the moment. But he says he’s happy that you’re interested and is sure that you will take good care of his home — no background check or application needed! The “landlord” says he’s willing to send you the keys right away if you wire the security deposit and first month’s rent ASAP.

Tammy Sorrento, a private investigator and founder of Fireball Approves™, a scam prevention company, says this is a giant red flag and a popular hook scammers use, knowing renters will take the bait on a highly desirable property when the rent is in the right price range.

Never, ever wire money.

“Wiring money is the equivalent to sending cash,” says Sorento. You’ll never see that cash again.

3. Asking for money up front

This scam manifests in several ways. For example, a “landlord” may request that you wire the money to place a hold on the property because there is so much interest in it. Normally, asking for a security deposit and first month’s rent is a common request, but it’s not if you haven’t signed a lease yet. Other scammers may ask for smaller fees ($25-$100) to process a rental application and/or credit check to verify whether or not you would be a viable tenant.

Sure, it sounds legit, but once the money is received, the scammer completely drops communication with you. It may not seem lucrative, but scammers can pull this trick off a hundred times a day to earn some quick cash.

Protecting yourself from a rental scam

If you come across an ad that seems too good to be true, it’s important to do your homework before sending money or continuing communication with the “landlord.” Here’s how to check if a rental property is legit:

Study the pictures

When looking at the pictures on the listing, check for any watermarks denoting the name of the rental company. If some appear, then you can call the rental company to see if they have ownership of the property in the ad and if so, whether they’re renting it.

Read the ad closely

Whether it’s email phishing or rental scams, one hallmark of a scam is poor grammar throughout the ad. When coming across the listing, are there many grammatical errors? And if there are, do you think a legitimate real estate agent would post the ad knowing that? While one or two errors isn’t uncommon, multiple errors indicate the person writing the ad might not be honest.

Research the market and property

After looking at the listing, research similarly sized properties in the area to see how the prices line up. Is the property you’re interested in much lower in rent than others in the area? This should be a red flag. In addition, when using a website like Zillow, you can research whether the house is in foreclosure. When discovering how to spot a rental scammer, doing your research will go a long way to help you.

Ask to see the property first

Any reputable landlord will have no qualms with allowing you to check out the apartment or home before renting. However, if the person you speak with provides excuses about why they cannot show you the property, then it’s best to walk away.

In all cases, if you think the ad is a scam, report it to the website hosting the ad.

What to do if you’re a victim of a rental scam

In the unfortunate event you become a victim of a housing scam, here are some things you can do:

  • Stop payment (if applicable): If the check hasn’t cleared, call to cancel payment with your bank. And if you have given your bank account details to the scammer, you might want to consider changing account numbers.
  • How to report a rental scammer: The FCC recommends contacting local law enforcement, the FCC, and the website hosting the ad.
  • Learn moving forward: Mistakes happen and by learning from them, it can help you identify apartment rental scams in the future.

The bottom line

The ease of posting rentals online means the market is ripe for housing scams. The three outlined in this piece are the most common ones you’ll come across. By doing your homework and knowing what to look for, it’ll be easier for you to spot housing rental scams.

Frequently asked questions

What is a rental scam?

This is where someone who doesn’t own the property posts an ad to defraud prospective renters.

How do you avoid rental scams on Craigslist?

Ask for the address then research it on Zillow to see if the property is in foreclosure, and verify the person who posted the ad owns the home.

Are rental application fees a scam?

Yes, they can be. If the poster requests an application fee before meeting them or seeing the place then chances are it’s a scam.

Where do I report a rental scam?

You should notify local law enforcement, the website hosting the ad, and the FCC.

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