Smart Renters Guide To Avoiding Rental Scams: What Every Tenant Should Know

Renting can be a great option when it comes to finding housing, but there are unfortunately plenty of scams out there that can make it difficult to stay safe. Knowing how to spot potential red flags is paramount if you want to protect yourself from fake landlords and other rental frauds—luckily we have some invaluable tips below on how you can avoid common rental scams and ensure your safety when renting a new place.

In this article, we will discuss some of the most common rental scams. We will discuss how they work and how to avoid falling victim to these scammers.

Understanding The Most Common Rental Scams

Rental scams can have highly detrimental effects on individuals and their families. Financially, victims could lose significant funds, including security deposits, upfront fees, or even several months' rent. This financial blow can have ripple effects, impacting victims' ability to secure housing in the future or meet other financial obligations. Emotionally, falling victim to a scam can lead to significant stress and anxiety, especially if it results in homelessness. It can also lead to a sense of mistrust and insecurity when dealing with future rental situations. Furthermore, the time and energy spent dealing with the aftermath of a scam — such as filing police reports, disputing fraudulent charges, and searching for new housing — can be substantial. Thus, understanding how to identify and avoid rental scams is crucial to safeguarding both your financial and emotional well-being.

Phantom Rental Scam

The Phantom Rental scam is one of the most prevalent scams in the rental market. Scammers operating this type of fraud create listings for properties that either don't exist or aren't available for rent. Oftentimes, they use photographs and descriptions gleaned from other online listings, making them difficult to identify at first glance.

The fraudster typically prices the rental below market value to attract a large number of interested renters. Once contact is established, they may create a sense of urgency, suggesting that multiple parties are interested in the property to encourage quick payment. The scammer then requests upfront payment, typically in the form of a security deposit or first month's rent. After receiving the money, the scammer disappears, leaving the potential renter out of pocket and without a place to live.

The keys to avoiding this scam are vigilance and skepticism. If a deal seems too good to be true, it probably is. Always verify the property's existence and the landlord's identity before making any payments. Be wary of landlords who rush the process or ask for money transfers using untraceable methods.

The Rental Bait and Switch Scam

The Rental Bait and Switch scam is another common deceptive practice in the rental market. In this scenario, scammers advertise an attractive property, typically priced competitively, to lure potential tenants. When interested parties get in touch, the scammer informs them that the advertised property has just been rented, but they have another "similar" property available.

This alternative property is usually less desirable and more expensive than the original one. Yet, the scammer uses the momentum and eagerness of the potential renter to push for a quick agreement and upfront payment. Once the payment is secured, the scammer becomes unreachable, leaving the renter with substandard property or even no property at all.

Renters can avoid this scam by being cautious of landlords who try to switch properties after initial contact is made. It's also advisable not to make any payments before viewing the property in person and verifying the landlord's details. Online reviews or asking to speak with current tenants can also provide valuable insights into the landlord's reputation.

The Fake Landlord Scam

The Fake Landlord Scam is another prevalent fraud in the rental market. Here, a scammer poses as the landlord or property manager of a property that they have no legal rights to. They may have acquired keys to the property illegitimately or even be showing a property that's for sale rather than rent.

These scammers often create persuasive listings with attractive prices to draw potential renters. Once they've baited an interested party, they rush the leasing process to prevent renters from verifying their credentials or the property's status. The scammer may insist on receiving the deposit or even the entire rent before handing over the keys.

Once the unsuspecting renter makes the payment, the scammer disappears, leaving the individual without a valid lease or any legal rights to the property. To avoid this scam, potential renters should always verify the landlord's identity and ownership of the property before making any payments. Furthermore, it's advisable to conduct a comprehensive property viewing and not rush into signing a lease or making payments.

In cases where the scammer has acquired keys to a property they don't own, renters can also protect themselves by requesting proof of ownership or contacting the actual property owner for confirmation. Additionally, conducting thorough research on the landlord and reading reviews from previous tenants can also help identify any red flags.

The best way to avoid the Fake Landlord Scam is to conduct a thorough background check on the landlord and the property. This includes validating the identity of the landlord, confirming the property ownership either through public records or through a real estate professional, and insisting on a comprehensive viewing of the property before proceeding with any transactions.

The Unverified Ownership Rental Scam

The Unverified Owner Rental Scam is a deceitful practice where scammers post properties that they have access to but do not have the authority to rent. The scammer typically posts an ad online, has intimate knowledge of the property and can offer actual working keys.

The rent is often priced below market rate to attract multiple potential renters quickly. Once a prospective renter shows interest, the scammer, posing as the landlord or agent, may provide the keys to more than one party.

The scammer pressures the prospective renter to turn over as much money as possible upfront and may even continue to collect rent for a period of time. Once there is any sign of the actual owner, the scammer disappears, leaving the potential renter with an invalid lease and the potential for housing insecurity.

To avoid falling prey to the Unverified Listing Rental Scam, renters should always review public tax records to speak directly with the owner of a property. Where this is not possible, renters can also do their due diligence by researching the managing company to ensure it exists and is in good standing with the state to do business.

The Sublet Scam

The Sublet Scam is a fraudulent scheme where the scammer poses as a tenant looking to sublet a property. In reality, the scammer has no legal right to sublet the property, as they either do not live there or have no formal agreement with the true landlord. The scam starts when the scammer posts a compelling ad online, offering the property at a below-market rent to attract potential victims quickly.

Once a prospective sublessor shows interest, the scammer may concoct a convincing story about why they need to sublet the property — perhaps they claim to be going overseas for work or study. They may even conduct a tour of the property, gaining access by posing as a prospective renter themselves or using a spare key if they are an actual tenant.

The scammer then pressures the victim into paying a deposit or the first month's rent upfront, promising to hand over the keys once payment is received. In some cases, the scammer may ask for personal information, pretending to perform a background or credit check. Once the scammer receives money or information, they disappear, leaving the victim without the promised accommodation and out of pocket.

To safeguard against the Sublet Scam, potential sublessors should always verify the identity of the tenant and confirm with the property owner or property management company that the tenant has the right to sublet the property. Furthermore, no payment or personal information should be provided until a formal sublease agreement is in place.

Key Deposit Scam

The Key Deposit Scam is another prevalent fraud that targets unsuspecting renters. In this scam, the fraudster often poses as a landlord or property manager. Once a prospective renter expresses interest, the scammer usually claims to be out of town or unable for any reason to show the property. They might use various excuses, such as traveling for work or living in another city. The scammer then tells the interested party that they can have a trusted third party show the property once a key deposit is made.

The prospective renter is then pressured into paying a deposit to receive the keys to the property for viewing. The scammer assures the victim that the key deposit is refundable if they decide not to rent the property. Once the payment is made, the fraudster usually disappears, leaving the prospective renter without keys and out of pocket.

To protect against the Key Deposit Scam, potential renters should be wary of landlords who ask for money before showing a property. It's also advised to meet landlords in person and verify their identity and ownership of the property before making any transactions. Online reviews and property records can be valuable resources for this verification.

Hijacked Listing Scam

The Hijacked Listing Scam is a fraudulent scheme that particularly targets the rental property market. In this scam, fraudsters typically hijack a legitimate rental or real estate listing by copying the details of the listing and posting it on another site with their contact information. The property may be real, but the ad and the supposed landlord are not. They could also advertise a property that doesn't exist or is currently occupied.

Once a potential renter expresses interest, the scammer poses as the landlord or property manager, often claiming to be unable for any reason to show the property. They might use excuses such as living abroad or being away on business and unable to meet in person. Whereas the reality is, they have no connection to the property.

The scammer then asks the interested party to pay a deposit or even the first month's rent upfront, often before the tenant has had a chance to tour the property. Once the money is paid, usually via an untraceable method such as wire transfer, the scammer disappears, leaving the prospective renter out of pocket and without a rental property.

To protect against the Hijacked Listing Scam, potential renters should always verify the legitimacy of the listing and the identity of the landlord. Be leery of landlords who ask for money upfront before you've had a chance to view the property. Always insist on meeting in person and signing a lease before making a payment. It's also a good practice to research the property and the landlord online. If the same ad shows up on other websites under a different name, that's a red flag.

Conclusion

In conclusion, a lot of these scams have a consistent purpose of getting you to pay money upfront in exchange for a valid lease. Despite the nuance in details the most basic way of ensuring that you are protected from scams is to verify the identity of who you are giving money to before you give it and also verify that the property is actually available for rent.

Falling for a Listing Scam can lead to significant financial loss and stress. However, by implementing vigilant practices potential renters can significantly reduce the risk of falling victim to such scams. Stay safe, stay informed, and protect your pocket when searching for your next home.