If you own a rental property, are scammers misusing your assets? If you are trying to rent, are you aware of the latest scams?
According to data reported by Forbes in July 2018, U.S. renters lost a staggering $5.2 million to rental scams. And an Apartment List study reveals that 43.1% of American renters—nearly half—have encountered or fallen victim to rental scams.
Though victims range in age and characteristics, the Apartment List study found that victims of scams are 42% more likely to be between the ages of 18 and 29—a population that tends to be inexperienced, in need of affordable short-term rentals, and with less household income to start with. This is a demographic that might need to rely on renting a place sight unseen, especially in the case of students from out of state or ones starting internships in strange cities.
The below-market rental listing is likely to appeal to this group. As well, although Millennials are tech-savvy, they tend to be surprisingly trusting when it comes to scams, and they’re not likely to perform much due diligence in securing a rental.
Apartment List says the following are the standard rental scams that it found in its study:
Bait and Switch
Sure, there’s a property for rent, but it’s not the impressive one advertised. The scammer collects a deposit and a signature on a lease, but once the renter signs, he or she is stuck with whatever overpriced hovel the landlord actually provides the keys to. But even that is preferable to the alternative—at least there’s a place to live, unlike …
Like the vacation rental scam, this one banks on a poor schmuck who needs a place to live. The scammer creates a fake listing for a place that doesn’t exist, isn’t actually a rental, or that he/she doesn’t own. The relatively low rent lures renters, who wind up with nothing to show for their money.
A scammer gets hold of a listing for an actual property for sale or rent, tinkers with the ad, then reposts it on another site with his or her own contact information.
The Apartment List study found that laundry, heat, and air conditioning are the amenities most lied about in rental listings. Others include outdoor spaces (such as balconies), dishwashers, gyms, and pools.
In a missing-amenity scam, the landlord dolls up the listing online by claiming it has amenities like these and others, which it doesn’t have, in order to justify a higher rent. Similar to a bait and switch, the renter doesn’t discover what’s lacking until he or she has already signed the lease and paid the deposit. (“A gym? No, no, I said Jim. My name is Jim. Sorry about that. Here’s your key.”)
It’s already leased, but a scammer or a crooked landlord doesn’t care—he’ll keep right on advertising the property, collecting application and security and deposit fees all day.
In a variation on this theme, some scammers “rent out” properties that are temporarily sitting empty—a crime that involves two victims, the homeowner and the innocent person who just needs a place to rent. The scammer scours neighborhoods looking for homes with no occupants, such as those that operate as second homes or those sitting empty between renters. They may even go so far as to change the locks or steal spare keys the owners may have “hidden” nearby. Once they’re in, they might just stay there.
A Rental Scam Victim
Sixty-nine-year-old Beverly McKinney of Central Indiana was on a fixed income. She went on Facebook to find a rental for herself and her two great-granddaughters. Using a page intended to connect homes with renters, she found a great three-bedroom home in Anderson, Indiana. She reached out to the landlord, who asked her to fill out a contract and send the $500 deposit via MoneyGram.
Once that was sent, the woman told McKinney, she’d send the keys. But no keys ever came, because the property’s actual owner, Steve Wagner, had already rented the property and had no idea who McKinney was or what had happened to her $500.
According to The Indy Channel, her local ABC affiliate, McKinney reported the incident to the police, whose investigation uncovered that the Facebook page—containing numerous grammatical errors, frequent pushes for more money, and a suspicious friend total of one—had been taken down, and the MoneyGram had been picked up by a man at an area Walmart. Chances are slim that she’ll see that money again.
“I just don’t want anybody else to get burned,” McKinney said to the TV reporter who interviewed her for the story. “It’s terrible … I lost $500 and my dignity.”
The Rental Shortage
The problem with rentals is that they can be tough to find, especially in a hot market, and often involve your need to move quickly. Before you jump headfirst into a sweetheart rental deal, take a few precautions:
Listen To Your Gut
Say it with me now: If it’s too good to be true … Trust your gut. You probably aren’t just getting really lucky with that low rent, world-class amenities, perfect location, and no-screening process. If your gut says something is off, listen.
Check On Other Sites
Check for that listing on other sites to see if it’s corroborated elsewhere. Sometimes scammers hack a listing on one site and repost their own versions on other sites. Confirm that the contact information is the same in every instance. Sometimes they’re even found in multiple cities and at widely varying prices.
Think About Your Decisions
Don’t make decisions on the fly. Your landlord should be methodical about doing a lot of checking on you, and you should exercise the same discretion. Anyone who eagerly promises to get you in quickly and skip the background check isn’t operating honestly.
Visit The Property Before Signing
Never rent anything sight unseen. Never send money or share personal information unless you’ve met the person and visited the property. It’s also a good idea to take someone with you. Avoid anyone from out of state or overseas, as that’s usually a way to justify asking you to wire money to a foreign account.
Make Sure The Information Is There
Watch for listings without photos or addresses, and double-check addresses on Google Earth, or just drive by, to be sure it matches the listing in quality and appearance.
Pay Attention To Money Handling
Avoid deposits that seem out of proportion or higher than normal, and never use cash, MoneyGrams, or wire transfers. That’s just asking for trouble. Use credit cards or checks only.
Search On Reputable Websites
Some websites are more reputable than others when it comes to finding quality listings. Craigslist is often problematic and filled with false ads and bait-and-switch tactics. Stick with higher quality sites such as Apartments.com or StreetEasy.com.
Find a Professional
Use a professional. This means finding an agent to help you locate a quality rental, or working with a reputable property management company.
Landlords and potential tenants need to be aware of all miscreants inhabiting the internet. Everyone must be cautious of rental scams nowadays.