For those looking to make the big move, finding a new home to settle down in can be exciting.
Unfortunately, amidst the high levels of stress that come along with moving to a new place, it can be easy to overlook the possibility of being a victim of a rental scam.
According to the Federal Trade Commission, prevalent and potentially catastrophic rental scams are rising.
Scammers can trick hundreds of dollars from you and suddenly vanish without notice.
It’s essential to be cautious when searching for rental deals because some rental listing websites will filter and eradicate these rental scams but a few fraudulent listings may still pass through.
You can better protect yourself by knowing the warning signs that commonly indicate a house or apartment rental scam.
Rental Scam Warning Signs
Before you fill out a rental application and sign a lease agreement, understand the following about rental scams:
Rental scams might…
They put pressure to rush through the rental process
There may be a reason for rushing you to make decisions. This also means a higher possibility for the landlord to quickly disappear after taking your money if anything goes wrong.
They ask for a hefty upfront fee or security deposit
The scammer’s priority is to get your money – quickly. They don’t care about leasing property to you and your housing needs, so when they request payment immediately, be alert.
They have a reason for not showing you the property
If the landlord reveals any reason for not being able to show you the property, such as being out of the country, this could be a rental scam.
They might even try to accommodate this by saying they could mail the key to you- after you wire them money or make a security deposit. Don’t send any money to someone you have not met in person.
They provide unreliable contact information
Check if the telephone number is disconnected or unusable. You can also search for the telephone number and the email address to see what results come up.
Keep in mind that the scammer could also hack a landlord’s or property manager’s email address, making them appear credible. It’s important to consider any of your suspicions and follow up on them.
They use broken English and a sob story in their posting
Often, these listings may include some “sob story” where the landlord is in a remote location.
In hopes that you’ll jump on their rental deal faster, these stories may elicit sympathy by involving some family or a financial issue.
Sometimes they might even claim to be a missionary or do some work in impoverished nations.
They don’t give out the rental unit address
The poster may not list the address and say it’s due to vandalism of the property in the past.
Some scammers don’t give out addresses because the rental unit doesn’t exist in the first place.
They are willing to skip the credit and background check
The process may be strenuous for some potential tenants, so cutting the credit and background check can be a relief to some.
But, if the landlord skips a vital procedure like this, it may just be another reason to entice you more quickly and close the deal faster.
Although a situation doesn’t have to meet all of these factors to be a rental scam, it’s crucial to be proactive and alert while searching for a new home since many financial liabilities accompany it. If a few of these signs do show up, take precautions and use your judgment wisely.
Tips to Avoid Being a Victim of Rental Scams
Visit the apartment first before sending any money
If the landlord asks you for money without meeting up or checking out the apartment, it’s a reason to be wary.
Photos may not accurately indicate the apartment, and you want to ensure the rental you’re interested in is real. The scammer could have acquired access to a property and posed as a landlord.
Be careful if they ask for an immediate down payment.
Hope A. Rising, a Registered Paralegal, shares her experience of “finding the [seemingly] perfect house.”
When I inquired why the rent (that included furniture, water, and electric) was so low, he sent an email stating he wanted to rent to a family that would take care of the property. He said the water and electric were included because he was looking at it more as a caretaker position, and they were the ‘pay’ for taking care of the property.
Something didn’t sound right, so I went onto the county clerk’s website and learned that on the day the guy posted the ad, he and his wife had actually sold the property.
I took the printed ad, all the emails, the “lease agreement,” and went to the property.
I’m glad I checked – had I not, I would have signed the “lease agreement”, been out $2,800, had no place to live, and no money to put down on another.
Review the expectations and agreement
For most rentals, there will be a lease or rental agreement to sign.
Carefully review this document to ensure it’s fair and nothing seems out of place, such as not having a security deposit returned after the lease is over despite no damages.
Deal with local landlords
Dealing with landlords directly makes it easier for you to verify the property owner’s identity and properly assess the authenticity of the rental posted.
Do some research and ensure the person claiming to own or manage the property is the landlord or property manager.
Are they who they claim to be in person?
Even if you meet face-to-face with the alleged property owner, it is easy for them to go by an alias and claim themselves as the landlord. Craigslist rental scams are not uncommon situations.
There have been cases where the scammer pretends to be the landlord in person and gives the victim access to the property without the actual landlord’s permission.
After they have you sign the forms and make the necessary payments, they might give you the key for you to check out the apartment where everything seems fine.
It’s not until the tenant makes rent payments and security deposits that the “landlord” suddenly disappears without a trace or even a lease termination, and you can’t get ahold of them.
If you meet up with them, ask to take a look at their ID and real estate pocket card. Always do research on the property and the landlord you are dealing with.
Carol Sankar, a real estate investor, says she has seen her fair share of rental scams during her career.
One of the biggest was a property that I had just acquired with a partner, which was listed and verified as vacant. However, the previous owner had evicted the tenant 90 days prior to the closing through his property manager. Subsequently, the property manager took advantage of the owner, who resided out of state, by placing tenants in the property and was collecting rent without remitting it to the owner. After the sale, we found tenants in the property who had no idea that they had been scammed by the previous property manager for almost $10,000 in rent which he collected. Needless to say, the property manager had also disappeared.
Be vigilant of significantly low rent
If the rent is too good to be true or lower than the expected market price in the area, it’s a good idea to investigate the rental before making further decisions.
Use rental rate tools to compare and see if the rent is reasonable. In addition, even after signing into a low rent rate, the landlord may decide to bring up a notice of rent increase if they ever wish to.
Be cautious about give out financial information
This includes your bank account number and credit card number.
There is usually no reason for a landlord to obtain banking information from you.
Having poor credit and needing to show proof of income through bank statements, as an alternative to employer verification, is typically the only reason a landlord should require banking details.
Don’t wire funds
Many rental scams might ask you to wire funds via money transfer platforms like Western Union.
They might provide convincing reasons why this could be the only means of payment.
However, when you wire money, the scammer keeps it, and you cannot get it back. It doesn’t matter what the money is for, whether an application fee, security deposit, or first month’s rent. You should not wire funds, even if a contract is involved.
Scammers could be after your identity, not just your money
Don’t give out your personal information, including your driver’s license and bank account, to anyone you don’t trust.
Sometimes the landlord may ask you for a credit report and check your credit score, which is standard procedure.
However, suppose the landlord in question sends a link for you to record personal information, whether it’s for a credit report or rental application. In that case, they could be trying to steal your identity.
If you have encountered an apartment or house rental scam, feel free to file a complaint by calling 1-877-FTC-HELP, or you can visit the Federal Trade Commission’s (FTC) online Complaint Assistant.
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