What is rental fraud and how to avoid it
Finding a new apartment for rent is indeed an excruciating process that takes a lot of time. Therefore, it shouldn't be taken lightly when it comes to applying for the desired property and putting down a deposit.
Although the majority of rental listings are legitimate, it is well known that thousands of scammers are out there looking for the next victim of their rental fraud.
What is Rental Fraud?
It occurs when someone pretends to be the landlord, the property manager, or the real estate agent of a property that in many cases, does not exist, and if it exists, it is different than advertised, not available for rent, or does not belong or is not managed by that person.
With the COVID-19 lockdown and restrictions (that are still in place in many cities across the US), there is a new opportunity for housing scammers: creating fake listings and claiming that onsite viewings are not possible at the moment. If in normal times renters have to be careful when choosing their next accommodation, in these corona times we recommend to be extra careful and check out the summary we have prepared, to help you recognize and avoid rental frauds.
Types of rental scams
There is not a definitive guide to spot fake listings and scammers are always trying to work out on new tricks. However, there are clear patterns on the fake listings posted by them:
- Fake or non-existent property: when the scammer advertises a property that does not exist, or it's not available for rent.
- Hijacked Ads: occurs when the scammer takes the pictures of an existing property for rent that has been listed somewhere, and posts it again on a different platform or website, changing the contact information to add his/hers.
- Property not available for rent: when the scammer posts a property that is not available for rent because it has already been leased, and tries to collect either the application fee, the security deposit, or the entire cost of the negotiation.
- Bait-and-Switch: happens when the scammer lists a property that is different than the one that is actually available for rent. In general, the property advertised is in better condition than the one that is for rent.
- Property with lack of amenities: in this case, the scammer lists a property that exists, but offering amenities that are missing.
How to recognize a rental scam?
Fake listings usually look like normal ones. Nevertheless, in many cases, the listing is "too good to be true" in terms of price, amenities, and location. Below are some examples:
- Extremely convenient property for a low price: Scammers will typically list a property at a price significantly below the average market price for a similar property, so the listing would catch the attention of more renters. In many cases, the property advertised also features very attractive amenities that normally wouldn't be included or accessible for that price.
- Lack of key details, such as address or pictures: In many cases, scammers post properties in generic locations (e.g. San Francisco), but they don't add the exact address.
Based on our experience while managing and helping our awesome housing community on Facebook, we have seen that many scammers contact renters that post on social media, offering them a property for rent. When the renter writes to the scammer, in many cases, this one asks the renter what districts or neighborhoods he/she is interested in, and magically, that specific property is located in a very convenient place. What a coincidence!
Another pattern is that the listing is missing pictures from outside or pictures where you can see the surroundings through the windows. In any case, always ask for the exact address, verify on Google Street View, and check the address and the property on different websites.
- Lack of screening process: Happens very often to attract renters with lower income or credit score. This is also very catchy because normally, renters are generally in a hurry to find their new home, so, skipping a step in the application process doesn't sound so bad, does it?
- Being required to pay an application fee or security deposit upfront: The scammer normally shares a few pictures and some information about the fake property. Then, he/she asks the renter to confirm right away if he/she is interested, as well as to pay an application fee or a deposit, in order to secure the property for him/her.
Keep in mind that reputable real estate companies, agents, or landlords won't push you to confirm your interest right after just viewing some pictures, and least of all, to pay anything upfront without visiting the apartment, or at least doing an online viewing.
- The person wants to send you the keys to the property in the mail: This is a red flag! Scammers always say that for some reason they are not in town, but that they can send you the keys to the apartment in the mail. Do not fall for it. Always make sure to have an onsite handover of the apartment, and to take time to check the property one more time, together with the landlord, property manager, or real estate agent.
Pro-tips to avoid rental fraud
Even though the listing looks legitimate, don't rush, and make sure to do your research before paying or signing anything. Here are some tips that will help you avoid becoming a victim of rental fraud:
- Do not transfer any money in advance: Never transfer any amount of money in advance. Agree to put down a deposit after you have visited the apartment and have signed a lease, and only pay the full price on the first day of renting. Also, be careful if the person you are interacting with asks you to wire some money via money transfer companies like Western Union or Moneygram.
- Do not overshare sensitive information: Sharing pictures of your ID card, passport, social security or tax number is not necessary, especially if you haven’t even visited the apartment. This is a common trick from scammers to collect pictures of IDs of people, to possibly use them to commit identity fraud.
- Research the property: as mentioned in our previous blog post Signing a lease during the COVID-19 pandemic, first verify on the internet if the same property has been listed on different platforms and by whom. Pay attention to the contact information, as well as to the property management company mentioned in the ad.
You can also search the pictures of the property listed, by running a Reverse Image Search on Google. This is a tool provided by Google, which basically retrieves an image in large databases in the world wide web, without needing to add keywords, allowing the user to see where that image has been uploaded, as well as to find content related to it.
If you find that these images were already used in old listings, or in a listing that appears to be for a different apartment, it is likely to be a scam.
- Verify the landlord: Research who's the landlord and try to get in contact directly with him/her, or at very least, with the current tenants. Renters that are looking for an apartment in New York, can verify the landlord by searching on Who Owns What, which is a helpful tool to research property owners.
- Beware of fake social media pages or profiles of real estate companies: If you are contacted via social media by a company’s page or profile, first check on the internet if that’s the official social media page or profile of the company. Take a look at the date of creation, number of posts, followers, reactions, etc.
This also applies in case you are interacting on social media, or in a classifieds advertisements website (e.g. housing Facebook groups, Facebook Marketplace, or Craigslist) with an individual who claims to work or to have any type of link with a company. Check his/her profile, research his/her name on the internet, check the website of the company in question, and try to get in contact with its customer support via email or contact form.
- Verify social media contacts: If you are doing your apartment research on social media, always verify the member profiles that you interact with. Ask them questions, look at their friends’ lists, see if they’ve been tagged in posts and photos, and search the internet for their name and location.
- Unable to see the property in person? In case you are not able to visit the property in person, or if you are moving to a new city, we still recommend asking a friend, relative, or colleague to visit the apartment. Also, with the lockdown caused by the COVID-19 pandemic, there are more and more housing companies offering virtual tours, which is a good solution.
Although there is no definitive guide to help you avoid rental frauds, doing your research and following this advice considerably reduces the chances of being scammed.