Rental Scams: How Do They Work & How to Catch Scammers?

Rental scams are specifically engineered to steal money from renters interested in property space. The deception may come in many forms, and all are monetary. These include being asked to provide a moving-in fee without seeing the apartment or paying an up-front security deposit. Considering rent rates have increased by double-digit percentages over the past year, the fraudulent deals seem too good to be true due to their usually lower rate. These criminals are taking advantage of the desperation of renters by luring them in various ways.

5 Most Common Rental Scams

1. Non-Existing Lease Contracts

Before moving into the property, renters must sign a contract that illustrates an agreement with the landlord that they can live in the designated space at a specific rent. The landlord and property manager must also sign the lease after the tenant. However, rental scammers may entice unsuspecting prospective tenants to sign fake documents. In these cases, the scammer is masquerading as the landlord and may even show the renter vague signs that they are the proprietor. Unfortunately, such contracts signed are void, and the scammer usually disappears once the financial transaction has been made for rent or a security deposit. 

2. The Hijacked ADs

Some scammers go a step further and hijack the real estate listing by changing the designated email address or provided contacts. It alters the ad though they will not change the name of the person that posted the initial advertisement. In other scenarios where the scammer has hijacked the email accounts of the landlord, they redirect the financial transactions to their desired account. 

3. Suspicious Money Requests

Sometimes the scammer will claim they are outside reach due to sudden travel arrangements but can send the keys to the property. They will ask a renter to send them money for the deposit before forwarding the keys. Of course, the keys will never come once the money has been sent. Scammers may also ask renters to provide a security deposit before viewing the property, touting that the listing is quite popular and may be snatched up at any time. 

4. Pre-Rented Apartments

Pre-leased properties have already been rented out at the time; the scammer contacts the renter. The scammer first posts an ad for a pre-leased or rented apartment and then collects the deposit or application fees before the renter confirms its vacancy. These cases are similar to suspicious money requests because the renter is asked to forward the deposit as quickly as possible before another interested party buys the popular listing. 

5. Identity Theft

At times, the motivation behind a rental scam is not to take the person’s deposit or rent but rather to steal their personal information. The scammer cultivates a relationship with the renter after being contacted concerning a listing and entices them to surrender their financial information during the transaction. Typically, the renter may not have viewed the listing but has a false sense of security concerning the scammer’s trustworthiness. The scammer can use their social security or credit card numbers to run up more charges, which will fall on the renter. 

How to Catch a Rental Scammer?

There are several warning signs that can help a prospective property buyer or renter decipher if a property is legitimate and that the landlord is the person they hope to issue a transaction. The first sign that something might need to be corrected is that they want to avoid meeting in person. An honest landlord will want to create comfort and accountability during the process. That means meeting in person and showing the renter the property records to determine if they are still interested. An arrest record check will also help ascertain that the landlord does not have a prior criminal record.

Secondly, a scammer will want to move things as fast as possible, so a renter will not have time to analyze the decision. There will always be an air of urgency concerning the transaction, and they will encourage the renter to send money before signing a lease. They usually do not have prolonged access to the inside of the property, so they cannot back up their claims.

Thirdly, the pricing of the property will also be too good. It may be priced below the going market rate within the area. The goal is to attract as many respondents to the ad before trying to defraud them of upfront security deposits. Alternatively, it could be a bait and switch where the owner courts different potential renters before quickly changing the price to the typical market price right before the renter signs the lease. If the renter has yet to check the fine print on the pricing, they will not notice the change and find themselves obligated to pay the higher price. 

Similarly, if there is no tenant screening process, it is also a red flag. Professional landlords typically set a screening process where they interview the tenant to ensure they can pay the rent regularly and take care of the property. This is to avoid tenants that will likely disturb the peace or bring criminal activities to the property.

How to Avoid Real Estate Scams?

As most real estate scams are due diligence related, it is advisable always to check the apartment one is about to rent before making any commitments. Checking the landlords’ arrest records is also a good approach to determine whether one is in safe hands. It is also advisable not to deal in cash or other non-traceable methods. The process should have a paper trail to protect both parties for accountability. Renters should not provide their personal information as well during the process unless it is essential. This is to ensure is no identity theft that could result in long-term financial or legal liabilities to the renter. 

Always Be Mindful of a Possible Rental Scam

Unfortunately, rental scammers are taking advantage of the current economic stresses by defrauding desperate renters. Rental scams are usually characterized by attractive images, but they are also easy to spot if the price is too good. The scammer also seems to be in a hurry for one reason or another, so the renter only knows what is happening once it is too late. The solution to these ploys is to adopt a no-compromise approach to due diligence. That means meeting the landlord in person, avoiding sending money before settling everything, and not providing personal financial information. The financial transaction should be the last thing one does following the signing of the lease.