12 Rental Scams You Should Know How to Spot
Sometimes, the signs are so subtle you don't realize you're about to lose your shirt—along with the place you wanted to rent.
A popular scam is when a legitimate listing is used by a person who doesn’t own the property. “The scammer pulls the photos and details to use as their own listing,” says Seth Stephens, director of sales for Renters Warehouse in Seattle. But the scam doesn’t stop there. “With this new fake listing, they post on a site like Craigslist, and they can flag to remove the original, legitimate listing.” Realtor Sep Niakan, the founder of Condo Black Book, got entangled in a scam like this when a scammer used Niakan’s realtor status in the bogus listing and even used Niakan’s name in a fake Hotmail address to sound legitimate. Would-be renters Googled Niakan’s name and found he was a realtor. He got a lot of angry calls from people who sent money to the scammer for a property that wasn’t available to rent.
The keys are in the mail
Tammy Sorrento, private investigator and founder of Fireball, a scam prevention company, says a glaring red flag is when the alleged property owner states they are out of town or the country and they will need to mail you the keys. Jennifer Zeller of Ludington, Michigan, almost fell for this scam when she found a home to rent on Craigslist. “The ‘owner’ proceeded to send email after email to my inbox explaining how he was a very successful doctor who was out of the country and needed someone to care for his home, and how if I would just send him the security deposit, he would mail me the key,” says Zeller. Her alarm bells went off when the “doctor” didn’t even mention references or a lease.
We fired the property manager
It’s not uncommon for renters to do a drive-by to see if the house looks as good as it does in the photos. But what if the property has a sign out front from a realtor or property management that doesn’t match up with the “landlord” you’ve been talking to? “The scammer will say they just fired their property manager so that when the renter does a drive-by, the scammer is hoping the victim will dismiss the management sign on the lawn,” says Sorrento.
You can pay the rest later
You can expect to pay a security deposit for a property, but if it’s not for the full amount, you may be at risk. “A scammer will likely not ask for the full amount due for a traditional move-in—such as the first month’s rent, a security deposit, and a pet deposit. Instead, they’ll only ask for an amount that is quick money,” says Stephens. “Be wary of someone who is pushing to have funds wired or mailed to them quickly.” If it sounds too good to be true, it probably is. Here are 10 more online scams you should know about.
Serious inquiries only
Most landlords will ask to run a credit check on you; it’s a reasonable and legal request in most states and part of the legitimate rental process. But if a so-called landlord tells you they need to run a credit check before they show you the property—they might say the property is so popular that they are only entertaining serious inquiries or a similar excuse—then you should do the running. A request for cash or wire transfers before you even see a property is a scam. While the scammer may only charge you $25 to $50 to run that fake credit check—a paltry amount to swindle—the totals add up if the scammer cons hundreds of renters. Don’t miss these 10 things your landlord wishes you knew.
The shady tenant
Sometimes the “landlord” is actually a tenant running a scam, says Joshua Rogala, a criminal defense attorney in Winnipeg, Canada. “The scammer is a tenant of an apartment in which he is vacating,” says Rogala. If you really like the house, the “landlord” is quick to let you know other people have expressed interest in it, too. “He asks for the security deposit in order to secure the apartment before someone else does.” Once the money is received, the tenant/landlord cuts communications with you and leaves the state. Once again, resist pressure when you’re renting and do some research on the property—or ask another tenant for the landlord’s name—if you suspect anything is amiss.
The landlord is too eager
When you’re tight on time and need to find a place quickly, it can seem like a godsend when the “landlord” is quick to lease you the property without asking for the usual credentials or references. “Most actual landlords will want to check if you have a criminal record, get character references, and confirm you have the ability to pay, either with a credit score or verification of your employment,” says Rogala. If the landlord skips this process but requests money, say “no thanks” and move on because it’s probably a scam.
The security deposit is way too high
Scams involving security deposits are all about quickly getting cash-in-hand with a speedy exit strategy. A security deposit is generally first and last month rent to cover any damages that may occur to the property. In most states, the landlord is required to keep that money in a special account and not touch it. A landlord asking for an excessive amount is something Rogala says to be cautious of. “The scammer is trying to get as much money from you as he can before disappearing.” These are the other things your landlord won’t tell you that could cost you.
The security deposit is way too low
When you’re on a tight budget, it’s difficult enough to find an apartment you can afford plus the additional security deposit just to get in the door. Scammers prey on the budget conscious by offering a low security deposit as bait. Rogala says the scam here is to entice the renter to pay before someone else can get the apartment.
You’re in my house!
This scenario happened to a friend of Sorrento’s. “The daughter was transferred to California and wired the security deposit to the alleged landlord. Once she arrived in California, she found someone else in the condo!” recalls Sorento. The daughter was communicating with someone posing to be the landlord. “She had no recourse because wiring money is the equivalent to sending cash,” says Sorento. To prevent something like this from happening to you, always use a traceable payment method. Look out for these 12 tricks con artists use to win your trust.
No dotted line to sign on
A lease protects the renter and the landlord. “It sets out the terms and conditions of the legal relationship, including the term of the lease, and the rights and responsibilities of the parties,” notes Rogala. If the landlord is willing to take your money but doesn’t provide you with a written rental agreement or says there’s no time to review the agreement with a lawyer, it’s not a good sign.
Who did I wire my money to?
Wiring a deposit to a realtor may seem safe—except that realtors are not supposed to receive wires or pass along wire information, according to Samira Tapia, a Realtor at Compass Beverly Hills. “Sometimes someone’s email at the escrow or title company has been hacked. The hackers read the emails to know exactly when to send the wire information to the unsuspecting renter,” she says. “Do not trust any emails that you receive with wire info; call the number you have from your Realtor to confirm wire info, not the phone number in any email you receive,” warns Tapia. Look out for these clear signs you’re about to get hacked.
Don’t get scammed
The bottom line, say the experts, is to trust your gut. Undoubtedly, the safest route for renting is to go through a reputable property management company or use a service like Fireball to investigate the listing on your behalf and ensure you are dealing with a legitimate owner. This is especially true when you have to rent a home sight unseen. Next, read up on these secrets real estate agents aren’t telling you.