Rental Scams: Red Flags to Look For So You Aren’t a Victim

by Lesly Gregory | Updated: Sep 28, 2023

With so many more renters relying on digital listings, it's now easier than ever for landlords and tenants to connect. However, these same technological advances also make it easier for rental scams and fraud.

Many situations can leave renters in a position where they need to find housing as quickly as possible. Things like financial insecurity, relocation, the sale of their current rental, etc. Combine these with increased competition in the rental market and you may become a target for rental scams.

To avoid being vulnerable to these situations, look for common red flags and steer clear.

Signs of possible rental scams

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, leaving you without your cash and without a place to live.

Identifying and understanding common warning signs for these money-hungry fraudsters 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.

1. When it's too good to be true

Unless you're moving to a new area, you're likely somewhat familiar with the average rental rates for houses 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 have comparable pricing based on the number of bedrooms, amenities and proximity.

A 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 have the most affordable price tag in the area. 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.

2. If the landlord lives out of town

This isn't always a rental scam red flag. Sometimes landlords do 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 without local representation.

Common excuses for why landlords may be out of town include a job, military commitments or missionary work. Rental scammers will insist you rent a property sight unseen due to their long-distance living situation. They'll often ask for a wire transfer or money in exchange for keys to the property. Don't do it.

3. When the landlord asks for money upfront

Yes, it's completely common to pay application fees when you decide you're interested in a property and fill out a rental application. That's the first time money should get exchanged. When any rental ad asks you to pay anything before getting to this point, and before seeing the property, a large red flag should fly.

Rental scams often include a request for money to show your commitment to the property before you've completed paperwork. They'll typically want the money wire transferred through companies like Western Union or MoneyGram. These transactions are untraceable, non-refundable and a definite sign someone wants to take your money and run.

4. If there's no lease

It's 100 percent required that you sign a lease when renting property. These documents protect both landlord and tenant. Never accept a rental without a signed lease in place.

Listings that don't require common documentation like a rental application and lease agreement are definitely rental scams. Landlords need this information to screen potential tenants. If that's not happening, something may definitely be up.

Be suspicious of any listing where the landlord is trying to avoid creating a paper trail back to the property. Most likely, they just want your money.

5. When the listing seems weird

A rental listing should be a well-thought-out ad. After all, it's the sales pitch for why you should rent that house. If you come across listings with excessive errors in them, either in spelling, grammar or punctuation, walk away. Too many typos of any kind are the mark of a scammer.

File a police report

Tips for avoiding 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 doesn't seem legitimate.

If you're new to renting a house, there are steps to take to prepare you for the rental market. They'll help you better filter out rental scams from actual listings, saving you plenty of time and stress as you find your perfect rental home.

1. Research all listings

A little digging can usually verify the legitimacy of the person and the property with which you're dealing. 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. Copied listings are a major red flag you can easily overcome.

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 do count and have become a useful tool during pandemic times that are 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.

2. Verify listing information

Sometimes scammers will withhold pertinent information about the listing to try and keep you off their trail. This could mean minimal pictures or not including the full address in the listing. All listings need an address, which gives you something you can check out on your own.

Copying and pasting the address into any search engine should give you a street view. You can check that the image matches what's on the listing. Most homes are also listed with at least one picture on multiple real estate sites, so you can double-check a few of those, as well.

3. Leave a paper trail

When it does come time to exchange money for a rental property, always leave a paper trail. Write a check for your application fee or digitally pay in a safe, secure way. You want to be able to go back and cancel a fraudulent charge if it comes to that. At the very least, you want to have a traceable location for where the money went should it turn out you've entered into a scam.

4. Report possible scammers

Keeping yourself safe from rental scams also means reporting people you suspect as frauds. It not only saves others from falling victim, but it takes that scammer out of play for the future.

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 the next steps to take. You can also contact the Federal Trade Commission, the Internet Crime Complaint Center, and/or your state attorney general’s office.

Keep yourself safe from rental scams

Not all rental scams are going to have such obvious red flags. Some scammers will go to great lengths to fool you, even meeting you in person to talk about the property. Generally speaking, though, these people are trying to make some money quickly. They aren't putting a ton of effort into the set-up. As a result, knowing the common tricks of the rental scam trade will help you become a smarter and safer renter.

The information contained in this article is for educational purposes only and does not, and is not intended to, constitute legal or financial advice. Readers are encouraged to seek professional legal or financial advice as they may deem it necessary.

Categories: Renters

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