Common Rental Scams and How to Avoid Them

If you’re searching for an apartment or rental home, chances are you’ve encountered sticker shock at how much rents have increased since the last time you rented. Or maybe you’re looking for your first apartment and can’t imagine paying more for rent than for all your other monthly expenses combined.

It’s not just your imagination that rental rates seem crazy high. For the first time ever, the typical asking rent nationally rose above $2,000 a month, according to real estate website Redfin. Some markets are hit harder than others.

For example, since 2019, rents increased by 48 percent in Austin, Texas, according to Redfin. Rents also shot up by 32 percent in Nashville, Cincinnati and Seattle and nearly 30 percent in Miami, Florida since 2019. Those high rental rates can make renting difficult or even impossible for many people.

With housing desperation at a high, rental scammers have risen to the occasion, advertising sweet, often too-good-to-be-true deals on apartments and homes for rent. But you don’t have to get tricked out of your money or personal information that could be used for identity theft just because you think you finally found an affordable place to rent.

Common Types of Rental Scams

Rental scams are schemes designed to trick individuals into making payments or sharing personal information for properties that are either non-existent, not available for rent, or falsely represented. Scammers often exploit the high demand for affordable housing or popular rental locations to lure victims into their fraudulent schemes.

Fake Listings

Scammers create attractive online listings for properties they don’t own or have no authority to rent. They use stolen photos and compelling descriptions to entice potential renters. Once victims show interest, scammers request a deposit or rent payment, leaving the unsuspecting individuals without a home and their money.

Cloned or hijacked ads

It’s easy for rental scammers to copy and paste a rental ad posted by a legitimate landlord, according to Trulia, a home and rental website. Then the scammer lists the property at a much lower rent in order to lure as many victims as possible.

This scam is aimed mainly at out-of-town renters who aren’t able to see the apartment in person before moving. In tight housing markets, potential renters may be willing to pay a couple months’ rent and/or a high security deposit without seeing the property to snag the “good deal.”

Trulia recommends searching for the address online to find out if other rental ads exist for the same property. You may very well  find the legitimate listing, going for a much higher rent.

Phantom Rentals

In phantom rental scams, scammers pose as property owners or managers and advertise a property that doesn’t exist. They engage with potential tenants, convincing them to send money or personal information to secure the rental. When the victims arrive at the property, they discover they have been duped.

Some scammers don’t bother cloning ads. They simply make up a fantastic deal on a great rental property that doesn’t even exist, warns the Federal Trade Commission (FTC). Then the criminal inserts an enticing image of a beautiful apartment or home that just about anyone would jump at renting.

Don’t be too eager to rent the space, though. That scammer isn’t looking for a tenant, only for someone to dupe out of their hard-earned money. “Their goal is to get your money before you find out,” says the FTC.

Identity Theft

Some rental scams involve identity theft. Scammers may request personal information, such as social security numbers or bank account details, under the guise of rental application forms. With this information, they can commit various forms of fraud, including opening credit accounts or draining bank accounts.

Overpayment Scams

Overpayment scams target renters who have found a legitimate property for rent. Scammers pretend to be interested tenants and offer to send a check or money order for an amount greater than the required deposit or rent. They then request the excess funds to be sent back to them, but the original check or money order is fraudulent, leaving the victim responsible for repaying the bank.

Recognizing Red Flags

To protect yourself from rental scams, it’s crucial to be vigilant and recognize the warning signs. Here are some red flags to watch out for:

1. Suspiciously Low Rent: If the rental price seems too good to be true for the area or property type, it’s a potential warning sign of a scam.
2. Unwillingness to Show the Property: Legitimate landlords or property managers should be willing to schedule in-person viewings. If they refuse or provide excuses, it could indicate a scam.
3. Landlords claiming to be “out of the country”: If the person you contact about a rental ad claims to be overseas in the military, on a church missionary stent or for another reason, that’s not a rental property you want to pursue, says the FTC. If the landlord can’t show you the apartment or home with a lease for you to sign, keep on looking. It’s probably a scam.
4. Requests for Wire Transfers or Cash Payments: Scammers often prefer untraceable payment methods like wire transfers or cash to avoid detection. Beware of any insistence on these payment methods. If a “landlord” asks you to wire money to secure an apartment, slam the door on that deal and don’t look back. “This is the surest sign of a scam,” warns the FTC. Once you wire money, you can’t get it back, just like if you’d sent cash.
5. Poor Grammar and Spelling in Communication: Many scammers operate from overseas and may have language barriers, leading to frequent grammatical errors and misspellings in their communication.

Protecting Yourself from Rental Scams

While rental scams can be distressing, there are proactive measures you can take to safeguard yourself. Consider the following precautions:

1. Research the Property and Landlord: Conduct a thorough online search for the property and landlord’s details. Look for discrepancies, negative reviews, or any signs of a scam.
2. Conduct an In-Person Viewing: Whenever possible, visit the property in person to verify its existence and condition. This will help confirm the legitimacy of the rental offer.
3. Use Trusted Rental Platforms: Stick to reputable rental platforms with robust verification processes and customer reviews. These platforms provide an added layer of security and reduce the risk of encountering scams.
4. Never Wire Money or Provide Personal Information: Avoid making any payments via wire transfers or sharing sensitive personal information unless you have verified the authenticity of the rental and the landlord.

What to Do If You’ve Been Scammed

If you were scammed by a fake landlord or phony rental ad or think someone tried to scam you, contact your local law enforcement agency to report the scam. Also report the fraud to the FTC. If the ad was posted on a website, make sure you also report the scammer to that site to keep others from becoming rental scam victims. If you have fallen victim to a rental scam, take immediate action to mitigate the damage:

1. Report the Scam: Contact the online platform or classified advertisement website where you encountered the scam and provide them with all relevant details. This will help prevent others from falling prey to the same scheme.
2. Contact Local Authorities: Report the incident to your local law enforcement agency. They can guide you on further steps to take and may investigate the scam if there is enough evidence.
3. Protect Your Identity: If you shared personal information with the scammer, take measures to protect yourself from identity theft. Monitor your bank accounts and credit reports closely and consider freezing your credit if necessary.

Rental scams pose a significant risk to individuals searching for rental properties. By familiarizing yourself with common scam tactics, recognizing red flags, and taking preventive measures, you can minimize the chances of becoming a victim. Remember to be cautious, conduct thorough research, and prioritize in-person viewings to ensure your safety and financial security when renting a property.

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