Beware of Rental Scams - Quicken Loans Zing BlogAcross the country, people are being targeted by scammers who advertise rental homes that either do not exist or aren’t available – only to find out when it’s too late.

This type of scam can be avoided if you stay one step ahead. We’ll share some common rental scam tactics, red flags to keep an eye out for and ways you can protect yourself from being a victim.

How the Scams Work

There are various ways rip-off artists conduct “business,” but here are some common scenarios:

  • A fake property manager might hack into a legitimate rental or real estate listing by changing the contact information and placing the altered ad on another site with a much cheaper price tag to lure tenants looking for a great deal.
  • A scammer finds an abandoned property, and creates an online ad claiming to be the owner. They might change the locks to the home, draw up a fake contract and collect rent in the form of cash-only.
  • A fake real estate agent may rent out foreclosed properties, run off with your cash and leave bogus contact information behind. One case in California had police stating that one individual copied listings from the Multiple Listing Service and somehow obtained lock box codes to the homes, making would-be renters believe he was legitimate!
  • A phony real estate agent may swap out business cards, rental contracts and even lawn signs at odd hours to appear genuine while showing a home that is for sale by a valid real estate agency.
  • An impostor rents a real, but unavailable, home or apartment to tourists or those moving from another state. They ask that a security deposit be wired in advance, but when the tenants show up to move in, they discover it was never for rent and just lost hundreds with nowhere to stay.

Warning Signs

Whether it’s an email, an online ad or a print ad, there are some red flags to keep an eye out for when searching for a rental property.

  • You find a listing for the same address elsewhere, but with altered wording, different contact information or a considerably different price. For example, if the ad you are viewing says rent is $750 per month, but another ad for the same address says it’s $1,400, there’s a good chance the first ad is fake.
  • You notice misspellings or unnecessary capitalization in their communication with you, or their correspondence is coming from odd or free email domains.
  • They want a security deposit or first month’s rent before you’ve met, seen the property or signed a lease. They convey a false sense of urgency by claiming to be out of the country, in the Armed Forces overseas or out of town when you pick a time and day to meet and view the property.
  • They request a cash deposit or application information, which they can use to commit identity theft. Never wire money for a security deposit, application fee or rent, as it cannot be traced, which is why they’re asking for it!
  • They don’t take the time to screen YOU! Real property managers prescreen tenants to make sure they can make their payments. If they fail to mention a background screening, that may be a red flag.

Avoid Being a Victim

  • It bears repeating – Never wire money or pay with cash. Keep a paper trail by making copies of checks, applications, receipts, the lease, contracts and any other materials.
  • Get a realistic price range by visiting renter resource sites to search for comparable homes and get an idea of what other properties are going for in a particular area.
  • Confirm the true owners of the property by either going online to your county records office or calling them directly to inquire.
  • Do a little third-party homework to confirm the identity of the agent or owner.If an agency name is listed, look up their contact information and call them directly. Drop by the office to meet them in person. If they’re not there, confirm with someone else at the office that the information you have is correct (matching). If you’re working with a good property manager, it’s likely they’re members of the National Association of Residential Property Managers and you can find out by visiting www.narpm.org.
  • Remember to ask plenty of questions. Do they have a certificate of occupancy for the home? If the dwelling was built prior to 1978, do they have a lead-based paint disclosure form? If you get answers that seem to be going in circles or they become defensive, be on alert.

You can reduce your chances of being a victim as long as you keep a high level of awareness during the process and do some research before agreeing to any paperwork or monetary commitment.

In the unfortunate event you become the target of a rental scam, report it to your local police department and the FTC. If you found the property through an online ad, contact the website to let them know so the post can be removed and other consumers won’t be targeted.

 

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