How to Spot and Avoid Rental Scams

by Kaycee Miller | Published: Feb 9, 2021

Digital transformation has greatly impacted the rental market, making it easier than ever for landlords and tenants to connect. However, technological advancements have also increased rental scams and fraud.

Many situations can leave renters in a position where they need to find housing as quickly as possible – financial insecurity, moving to a new area, sale of a current rental property, etc. Additionally, most of the country is seeing lower vacancy rates and increased competition in the rental market. Unfortunately, online fraudsters coupled with a rushed timeline can make renters vulnerable to potential rental scams.

Common rental scams to look out for

Rental scammers’ top priority is money. They typically post deceptive vacancy listings on reputable listing websites and ask for either security deposits, first month’s rent or both in exchange for keys. Once they have your money, the scammer disappears and you are left without your money and without a place to live.

There are a few red flags you should keep in mind when searching for a new rental. Identifying and understanding these warning signs will keep you safe and help you avoid giving your hard-earned money to the wrong person. Be on the lookout for these common rental scams.

Too good to be true

Unless you are moving to a new area, you are likely somewhat familiar with the average rental rates for properties in your neighborhood. Even if you're relocating, a bit of research should give you a general idea of the price range for rental properties in your new city or town. Properties should be priced comparably based on number of bedrooms, amenities offered and proximity.

The general rule of thumb: if you see a property that seems too good to be true, it probably is. A large, newly renovated home in a desirable neighborhood should not be the most affordable home you can find. A scammer has likely copied the photos and property information from another rental listing and lowered the price to attract attention. It’s not worth your time to reach out and see if these listings are real or not – they usually aren’t.

Out-of-town landlord

Sometimes landlords live in a different state than the rental property they own, but most will use a local property manager to represent them if this is the case. Be extremely cautious when responding to rental ads of landlords who claim to be out of town or even out of the country,  especially if they ask you to pay without meeting them in person or viewing the property.

Common excuses include landlords being out of town for a job, military commitments or missionary work. Rental scammers will insist that a property be rented sight unseen due to their long-distance living situation, and ask for money to be wire transferred in exchange for keys to the property. Don’t do it.

Money for keys

Similar to the out-of-town landlord rental scam, any rental ad that asks you to pay money before seeing a property (not including standard application fees) is likely a scam. Sometimes scams will ask for money to show your commitment to the property and promise to hand over the keys at a later date, but won’t hold up their end of the bargain.

Any potential landlord asking for money to be wire transferred through companies like Western Union or MoneyGram should be a major red flag. These transactions are untraceable and non-refundable, making them a perfect venue for rental scams.

There are certainly other types of rental scams out there, some even going as far as to meet in person and present themselves as a landlord or roommate. Of course there are highly complex rental scams that could fool even the best of us, but generally speaking, you’ll be able to tell that something seems off early on in the communication process.

How to avoid rental scams

Experience is one of the best ways to avoid rental scams. The more times you’ve gone through the rental process, the more likely you’ll recognize red flags early on. Trust your gut and don’t be afraid to walk away from a rental that seems like a scam or doesn’t seem legitimate. 

Do your research

A little digging can usually verify the legitimacy of the person and the property with which you're dealing with. If you find one property listed multiple times through different landlords or property managers (especially all at different prices), take this as an indication that something may be wrong. Always meet a landlord or property manager in person before signing a lease or paying any money, and insist on viewing the property as well. Virtual tours have become a useful tool during pandemic times that is likely to stick around moving forward.

If you're moving out of state or are experiencing any other reason that makes an in-person meeting impossible, research to make sure you’re dealing with a real rental professional. Never be afraid to ask for references, check property records or read online reviews from other tenants.

How do I report a scammer?

If you come across a rental listing that looks like a scam, don’t hesitate to use the listing website’s tools to report or flag it. If you suspect a rental scam or become the victim of one, immediately report the incident to your local law enforcement, who will advise you on next steps to take. You can also contact the Internet Crime Complaint Center or the Federal Trade Commission.

Keeping these red flags and tips in mind will help you avoid scams and fraudulent landlords in the future. Even if a listing appears to be somewhat genuine, trust yourself and walk away if you feel it could possibly be a potential scam.

Categories: Renters

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