The Most Common Rental Scams & How To Avoid Them

By: ROS Team

Scams are a universal phenomenon, and the real estate sector is not immune to them. Perhaps you have witnessed a friend or loved one get caught up in a scam or, worse still, you have been the victim of one.

Just as technology evolves, so do scammers and their schemes, making it quite challenging to spot the difference between legitimate advertisements and fraudulent ones. Therefore, it is of utmost importance to educate yourself on the different types of scams, especially if you’re going to rent a property.

1) Scam Listings

Every now and then you will find a listing that seems too perfect to be true. You may have come across a genuinely great deal or find that the advertisement was created by a scammer who is using the ad to exploit anyone interested in the property. They do this by taking the original advertisement information to create their own.

Most likely, the scammer’s goal is to get money from unsuspecting would-be tenants by promising an amazing deal with the payment of a deposit. They even subject the inspection to advance deposit, not allowing for a virtual tour.

Scammers almost always are unable to meet the tenant in person because they are out of the city or because of a family emergency. Your best bet to avoid scam listings is to ask for a tour, in-person or virtual, and only agree to pay a deposit afterward.

2) Costly Background Check Scams

A background check is a necessary step in the tenant screening process. Most landlords hire a company to complete tenant background checks and charge applicants a nominal fee to do so. If you are asked to pay more than $60 for the background check screening it should raise a red flag. To reduce the risk of being scammed, avoid paying cash for a background check.

3) Apartment Scams

Another common rental scam is when landlords allow tenants to live in an apartment without signing a lease. In the real estate sector, everything is documented. So be leery of anyone who tells you that there is no need for documentation. Even month-to-month rental agreements require some form of documentation.

Apartment scams are more prevalent now since more property owners are offering virtual tours and remote lease signing due to the pandemic. No matter who you choose to view or sign for your new apartment. Make sure you thoroughly read and sign a rental agreement before moving in.

4) Bargain Priced Property

A good deal is tempting, but if it’s priced well below the local market value. Whether it’s rental property or property available for sale, there’s a good chance something is wrong. Scammers usually set an artificially low rent and then ask for a security deposit and the first month’s rent upfront, only to disappear afterward. If you find a property priced below the market value, ask why.

5) The Owner Isn’t Hosting the Property Tour

There are legitimate scenarios in which someone other than the owner shows the property. A way you can tell if the person is running a scam is if they don’t have access to all parts of the property and/or can’t provide much detail about the application process or lease terms. It’s possible they may request a prospective tenant’s security deposit and the first month’s rent and then disappear.

How to Avoid Rental Scams

If the unit is already occupied, speak to the current tenant. The most authentic information can come from them. Ask about the rent increase policy, their average cost of utilities, and structural issues in the building. Additionally, ask about the security deposit and the lease terms.
Trust your gut—if you feel something is wrong about any aspect of the advertisement or transaction, look for something else.
Don’t transfer money or give your personal information to anyone until you’re able to validate the listing.
It cannot be said enough that, in the real estate sector, your best asset is a real estate agent or broker. You’re less likely to be scammed if you have hired an agent who can do the research and vetting for you.

Things to Do if You Identify a Scam

Report the scam to authorities.
If you came across a fake ad online, report the scam to the website or platform where you found the listing.

Final Thoughts

Anyone can become a victim of a scam. However, if you invest some time in learning about potential rental scams, the probability that you fall prey to one becomes significantly less.