Beware, Rental Scams on the Rise Due to Pandemic 2021
Rental Fraud on the Rise
Currently, rental scams and other online fraudulent activity is skyrocketing! More than ever, consumers are turning to the world wide web for goods and services due to COVID-19 recommendations and restrictions. There have been 535,664 overall fraud reports from January 1, 2020, to June 29, 2021, according to the Federal Trade Commission, for a total of approx. $480.36 million lost. To circumvent an online rental scam, it is important for prospective tenants to get educated. This article will illustrate the online rental scam archetype, then provide information on how to avoid the con.
Masters of Mimicry, How to Identify Rental Scams
Crafty criminals find rental properties online, then steal the photos and information to forge a listing, inserting their own information. The property may be vacant, occupied, for rent, or not. Sometimes the scammer may even rent an apartment to use for bait. Often the listing price is offered much less than the local rental market value. When the prospective tenant inquires about the listing, scammers take several different angles.
Beware of Upfront Payments & Background Checks
Generally, most scams include some upfront payment by wire or cash for any or all of the following: first months, last months, security, or background check. They might use high-pressure sales techniques, explaining the great deal and high level of interest the listing is getting. Basically, this unbeatable deal will not last, so you better get it now. Fake owners or representatives of the property instruct potential tenants to wire money without physically seeing the property or without a signed lease. Some even had phony agents meet with unsuspecting tenants with a mock key, illegitimate lease to sign, and often even a physical tour of the home. Many scam artists have elaborate stories about being out of town, temporarily out of the country, or claim to be dealing with a family emergency, all excuses as to why you cannot see the property or meet the landlord. After the pitch, the prospective tenant is convinced to either wire them the money or pay cash.
Sites Riddled with Rental Scams
How to Avoid Rental Scams
Use a Reputable Realtor
- It is best practice to use a referred or recommended real estate agent to protect yourself against rental scams.
- Have a look at your state's division of corporations to verify the realtor and brokerage office.
The best way to avoid rental scams is to use a reputable, trusted realtor. If friends or family members are not able to recommend one, look up local brokerages. Use your state’s corporation’s website to verify that the business is active and legitimate. This can be found by searching for your “states name” with “state division of corporations” after. Most states have an easily navigable site where you can search a business’s name. For example, search Florida State Division of Corporation. Make sure it is the government website and not a third party. Not all, but most will be .gov. You can search the records for a business entity, or individual realtor, by name, office, address, or license number. This will verify that they are, in fact, a licensed office or realtor.
Manipulated Domains & Contact Information
The beginning of a website domain should have an S as in “HTTPS.” The S indicates an SSL certificate that protects visitor’s information moving from the site to the server. In the middle, examine the domain name. Look for sneaky extra letters and punctuation. Scammers will take a reputable company’s name and change it slightly enough to trick the eye. At the end, anything aside from .com, .org, .gov, or .edu should be questioned. On email addresses, also look for odd punctuation, extra letters, misplaced capital letters, and other grammatical errors. The email should be from Gmail, Outlook, or other established providers. Some large companies have their own email signature. However, be sure to look for discrepancies in the name.
Get to Know the Area & Landlord
- Research the rental market of the neighborhood.
- Match the owner's name to the property record.
- Ask specific questions and request contact information.
- Have a look at the municipality website.
- Refuse to send money until you have seen the property, have verified specifics, and have a copy of the executed lease.
- Do not provide your social security number or any other sensitive information until all your research has been done.
Research the Rental Market
Do a deep dive and research the neighborhood you are looking to rent in. Look at average rental rates. If the rental listing price is much lower than the average, it could be a scam. If the area features 2 bedrooms, 2 baths with an average monthly rent of $1,700, most likely the $600 advertisement is fraudulent.
Search the address, and if possible, try to get connected with someone who lives in the neighborhood or a previous tenant so you can have a better idea of what the actual cost of living is and what processes they took to secure their living spaces. Many neighborhoods have a communication network, whether through email, a private platform, or a social media group. Look into the municipality website and try to get connected with the community as a potential new resident.
You can search the county property records to confirm the owner’s name. Search for the county’s property appraiser. Most will have a comprehensive website where you can search by address. For example, Florida’s Palm Beach County Appraiser. You can then verify that the owner's name matches the Landlord's.
Depending on your COVID-19 vulnerability, it is best if you can meet the Landlord, and get a tour of the rental property taking all safety precautions, and bring a dependable friend along. If you are vulnerable, send trustworthy friends or family members. If the Landlord is unable to meet with you but sends a property manager or assistant, ask all the questions you can think of to verify who they say they are. Ask them for their full name and who owns the property. Ask them their relation to the property owner. Ask them for their business license number. Ask them where they work, what property management group they work for. If a company owns the property, ask the company’s name. Ask for the landlord's contact information. Ask for property details. Ask specifics.
Virtual tours are an option as well. Only after you have done your research, are working with a legitimate realtor, or directly with the validated landlord. Be sure you have done all your research, have met the landlord, seen the property, and have a copy of the lease before providing any sensitive information or sending any money. Consider using a credit card or check for the deposit to provide additional protection.
Rental Scams Aimed at Landlords
- Work with a legitimate real estate agent or brokerage.
- Perform a background check, confirm income, employment, the number of tenants, and pets, also request references.
- Add watermarks, logos, signatures, or branding to photographs.
- Perform a reverse image search on your photographs.
- If possible, meet potential renters in person.
- Get a copy of the fully executed lease, and make sure the renter’s deposit check clears before distributing any funds.
Prospective tenants are not the only ones vulnerable to online fraud. Landlords and property management companies also need to be alert. The best way to avoid a scam is to use a reputable realtor or brokerage. Paying a commission, often forfeited from the first month’s rent, is worth it to ensure a competent, reliable tenant. Use the same techniques recommended above to find a reputable brokerage or real estate agent.
Tenant Background Checks
Monitor Your Listing for Rental Scam Indicators
When you list your property online, make sure to add branding, watermarks, or signatures to your photographs. Do a reverse image search on your own photographs to ensure potential renters are not scammers stealing your information. Landlords and property management companies also need to be aware that some criminals rent a unit to use it to scam people looking for a place to rent.
Rental Scam Wrap Up
In conclusion, both landlords and tenants should get educated to avoid an online rental scam. Perform thorough research before pulling the trigger. Use a licensed realtor or brokerage to provide additional support and protection. Examine listing descriptions and photographs meticulously for red flags. See the property yourself and meet the landlord or tenant. Investigate them with specific questions and look for inconsistencies. Refuse to pay anything until you are certain it is not a scam, and you have a copy of the fully executed lease. Following these techniques promote mindful, intelligent real estate, helping you avoid falling prey to rental scams.