8 Red Flags to Help You Spot a Rental Scam
Avoid falling victim to online rental scams by knowing the most common tricks.
Think twice if the listing info is vague and the landlord seems eager to make a deal without a background check or meeting.(Getty Images)
With just about every rental search beginning online these days, it's a given that con artists will try to take advantage of eager consumers. Combine fake listings with rental brokers looking to pull bait-and-switch operations with rentals of lower quality or higher rent, and you'll have a hard time believing which listings are real.
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"You're going about this search, and let's say half your time is being spent on this type of fake listing," says Ori Goldman, CEO and co-founder of Loftey, an apartment rental agency in New York City. Goldman and his brothers launched the company in 2015 to combat the number of fake listings online, offer a free service to consumers and help people secure a rent reduction or free move.
The Federal Trade Commission warns consumers about rental listing scams as a common danger on its website, instructing individuals to report suspected scams to the site the listing was posted on, as well as local law enforcement and the FTC.
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Major red flags that can help you identify rental scams include:
- The listing photos have an MLS watermark.
- The listing details are vague.
- They don't want to show you the place first.
- They're ready to make a deal with no background info.
- They're out of the country.
- They want you to sign before seeing anything.
- The asking rent doesn’t match up.
- They instruct you to wire money.
The Listing Photos Have an MLS Watermark
If the rental listing's photos sport a watermark – which is used to identify the owner of the photo – proceed with caution. Scammers sometimes illegally pull photos from the local multiple listing service, where properties are listed for sale by real estate professionals. When a photo appears with an MLS watermark, the person who posted the rental doesn't have the original photo because he or she isn't actually associated with the property.
The FTC warns that scammers will commonly copy a rental advertisement word-for-word as well, merely changing the email address or phone number associated with the listing and posting it on a different site. Just ask Kaeti Bancroft, owner of Metro Brokers in Littleton, Colorado. Upon arriving at a vacant rental property she owns to show it to a potential tenant, she found a woman storing things in the backyard shed. The stranger reported that her granddaughter had just rented the place and was ready to move in after sending $500 for the first month's rent.
But Bancroft hadn't been a part of that deal. "Somebody had taken the information and pictures (and) gone on Craigslist with all the information," Bancroft says.
The Listing Details Are Vague
Not everyone is great at writing a rental description, but if basic details seem overly vague or don't quite make sense, it's probably because the person who posted the property has never been there. Omitting details on utilities or mentioning an attraction that's more than a mile away as being within walking distance can indicate that the poster isn't familiar with the area or doesn't expect you to be familiar with it.
For brokers looking to pull a bait-and-switch on a renter searching for a new home, Goldman says it's common for them to avoid including the exact address of the available apartment so the renter can't spot the lie. "You don't see exactly where it is – you just get a circle on a map, and then that's an easy way for them to say, 'Yeah, that's a different building,'" he says.
They Don't Want to Show You the Place First
If you reach out about an online rental listing and the person who responds doesn't immediately ask to show you the available space or at least discuss options for a virtual or video tour, consider it a telltale sign that he or she has no association with the property. Scammers could also pretend to be a renter interested in a sublease or lease with a small-time landlord, aiming to get financial information. If they have no interest in learning more about the property or coming to see it first, it may be a scam.
They're Ready to Make a Deal With No Background Info
You want a landlord or property manager who seeks reliable tenants. If a supposed landlord asks you to sign a lease with only email communication and no background on your financial stability, he or she is likely looking to get a one-time payment from you and may disappear before you move.
The FTC warns against paying a security deposit or first month’s rent before you’ve signed a lease and met the landlord in person. You should never submit any amount beyond an application fee before you've confirmed the space is available, the individual you're working with is associated with the property and the contract makes you the legal tenant.
They're "Out of the Country"
The reason many scammers give that they can't meet with you in person is they're temporarily out of the country. As the FTC reports on its website, scammers may even make it seem realistic: "It might even involve a lawyer or an 'agent' working on their behalf. Some scammers even create fake keys," and send them to you in the mail.
They Want You to Sign Before Seeing Anything
To avoid brokers looking to trick you into paying them a fee for an apartment they falsely advertised, don't agree to sign anything before you’ve seen the place that was promised.
Goldman says these brokers will have you sign a contract that states you owe a finder’s fee for any apartment they show you that you choose to rent. You may end up liking the place, but it probably wasn’t the place you wanted originally. "Just in general, you're there under false pretenses," he says.
The Asking Rent Doesn't Match Up
Con artists and shady brokers will hook many victims with the promise of rent that can almost seem too good to be true. "That stuff is just all over everywhere," Bancroft says.
If you're looking at rentals in a certain neighborhood and spot one for a few hundred dollars less than the rest, proceed cautiously. Chances are it's either a fake listing or a fake rental rate to try to draw you in.
They Instruct You to Wire Money
Nigerian prince or not, any request for you to wire the security deposit or first month's rent is a clear sign of a scam. Once the money has been collected, there's no way for you to get it back, and the person you thought you were in contact with can easily disappear.
Since Bancroft's experience with rental fraud, she says she's found that renters have grown more cautious. "They're not so anxious just to send their $500 off to some place in Texas," she says.
But don't assume you've outsmarted all fraudsters, Bancroft warns. Con artists may simply try harder to trick you.
Due Diligence Tips for Avoiding a Rental Scam
- Research the landlord. With a simple Google search, you can find out if the person is associated with the area, or even if they’ve been named in scams in the past by news outlets, local law enforcement or previous victims.
- Verify the address. This helps you avoid a bait-and-switch from an agent who’s trying to get you to accept another apartment. Search the address online to see if the property is listed for sale by a different real estate agent or if the rental shows different contact information elsewhere, which is a sign that someone is using the property as a scam.
- Check street views of the property. When you look at the property on an online map, click on the street view option to see if the property matches the exterior photo in the listing.
- Visit and tour the rental. If you do this, you're also more likely to notice other details that may be deal breakers for your next home, like an aggressive neighbor dog, a busy street or poor upkeep.
- Meet in person. Many scammers are unwilling to meet in person, and if you do so for an apartment tour, you’ll be able to get proof of access to and knowledge of the property as you walk around and ask questions.
How to Report a Rental Scam
A scam meant to cheat you out of money should be reported to the police. Provide a screenshot of the rental listing and any emails you exchanged with the individual. Additionally, report the listing to the website where it’s advertised, and report fraud to the FTC here.