The Online Rental Scams and How to Avoid Them

Would you marry this person? No? Then why would you rent from a landlord if you couldn’t meet him nor see the apartment first?

Here’s a fable for you. You’re hunting for an apartment online. You have a budget that’s towards the lower end and are tired of looking in the bad neighborhoods, so you take a quick look over into a trendy, name brand area. Suddenly you spot it! A three bedroom house for rent for just $800, when all of the other listings are $2000! And it’s empty and move-in ready. The address is even in the listing so you’re pretty sure it’s legit.

You contact the landlord. They say they’re out of the country working with the Peace Corps in Africa, so they can’t meet you in person. However, they suggest that you go drive past and take a peek in the windows if you like. You might do so. Or maybe you think, “gosh, this landlord is so clueless keeping the rent so low! I should jump on this before he figures out what the real value of his listing is.”

The landlord sends you an application so they can pull your credit. You fill in all of your financial information and send it along. You hear back quickly – you’re approved! Just wire over the rent and a security deposit and the keys are yours! You head down to your friendly neighborhood Currency Exchange, send along the funds, and sure enough a few days later you get a package from Nigeria with a set of keys. You rent a moving truck, pack your things, and are all set to move into your new home. Everything is going great for you until you walk up to the door and try to open it with those keys. After that, it all goes pear-shaped.

The keys don’t work. In fact, the keys would never have worked in the first place, as your friend in Nigeria doesn’t actually own the property. They copied and pasted the info in the ad from a legitimate listing, either for a foreclosed home or the real agent for the apartment. They used the original agent’s language so that their own weak English was not revealed. They may have even nicked the photos from the original listing.

Congratulations, you’ve just fallen for the most common online rental scam. The scammer now has your rent, your deposit, and all of the financial information necessary to steal your identity. Shall we avoid this henceforth?

I feel dirty after writing that story. Here’s a puppy to help clear our heads before we continue. (via dailypuppy.com)

An Incredibly Pervasive Scam

Several months ago, scammers posted an ad on Craigslist luring victims to a Hollywood apartment. One woman paid a deposit of more than $1,300 for the rental property. She was even given a key that turned out to be a fake. She later said her family was displaced by the scam. — “Realtors warn of online rental scam“, Ric Romero, ABC7

 

Robert Hagberg, Freddie Mac’s associate director of fraud investigations, said in an interview that foreclosure rental scams are becoming a significant problem, in part because of the sheer number of foreclosed properties on the market for sale. — “Housing: Scammers renting foreclosed homes in newest rip-off“, Kenneth Harney, Arizona Daily Star

Alright, dear piggies. Repeat after me. If it looks too good to be true, it probably is.

I get alerts when news articles about apartments appear on the web. The most common articles are unfortunately about apartment fires, but I also see articles about people falling for apartment scams at least once a week. I’ve had my own listings copied by scammers too – it’s almost impossible to avoid. Therefore, in hopes that at least a few of you will avoid sending money to these miserable louts, here’s how to ensure that when you sign a lease, you’ll actually get an apartment in exchange.

How to Avoid Apartment Scams as a Renter

  • Know the price range for apartments in your chosen neighborhoods. Our quarterly apartment surveys will help you to figure out a ballpark figure for some Chicago neighborhoods. You might see an apartment that’s a little bit lower than the average, but not by much. Most landlords will set their price based on other apartments nearby. Neighbors talk to neighbors and no landlord wants to be getting less than her apartment is worth.
  • Don’t rent a place unless you’ve seen the inside with a licensed agent, property manager, or the owner of the property. A responsible landlord who is stuck overseas should have a reliable agent on the ground here to show the property and handle maintenance issues as they arise. Don’t be so excited to take advantage of a landlord that you sell yourself short on the quality of care that the property may have received in recent years.
  • Double check the ownership using a third party, government resource like CookCountyPropertyInfo.com before you send your personal info to any prospective landlord.
  • Do some searching to see if other apartments in the same building have rented for a similar price in recent years. If you see a little wobbling in price that’s OK, but a sudden drop of 20% or more is unlikely to occur, especially in the current booming Chicago apartment market.
  • Work with an agent who can show you properties of good repute and serve as a seasoned eye in weighing one apartment against another. Talk with your agent about how they avoid scams before you sign on with them. Many Realtors who focus on home sales do not understand the peculiarities of the rental market, just as not every leasing agent could help you to buy a house.
  • Foreclosures are another prime type of property that get “rented out” by scammers. If you search for the address and find out that it was a recent foreclosure, you’ll want to make doubly sure that the individual advertising it is either the new owner or an agent for the bank.
  • Note: the scams are generally a problem on sites that offer free ads, like Craigslist, Trulia and Hotpads. Sites that require landlords to pay for their ads like Domu, Apartments.com, and sites owned by real estate brokerages are in the clear and you can probably trust most of the listings you see there.

How to Avoid Apartment Scams as a Landlord

Although renters may not believe it, it’s just as distressing for a legit landlord to discover that their apartment has been used to scam an innocent bystander. You feel awful, you feel used, and you usually have to be the one to break the bad news to the unfortunate renter who got taken for a ride. There’s legal issues that arise as well, especially if a legitimate renter and a scammed renter meet face to face on moving day. (Attention sitcom writers: this is your next premise right here!)

Unfortunately the networks didn’t like my idea for a wacky sitcom. This article may be a cleverly disguised attempt to get some exposure for it via alternate means.

Even if you have a Realtor or leasing company handling your listing, it’s important that you take responsibility for your property and keep an eye on what’s happening in the marketplace. Here are some ways that landlords can help to put the scammers out of business.

  • If you have a property on the market for rent, do a search for it periodically by address to see how it’s being listed. If you’re using an agent, ask which sites they’re using to market the property.
  • Take note of some of the more unique phrases that your agent uses and search for them on Craigslist. Scammers will usually copy and paste the text of legitimate ads verbatim.
  • Most free listing sites offer the means for guests to report fake ads. Use these methods to get the ad removed. Do not try to take on these scammers yourself unless you are very sure of what you are doing.
  • If you’re listing a single family home for rent, place a prominent For Rent sign in the yard with either your contact info or that of your agent. Leave a flyer inside the property listing the same contact info and the list price of the property.
  • List your rental exclusively with a single Realtor instead of listing it haphazardly with multiple rental services. Many of the more reputable rental services will still get exposure to your listing via the MLS. You’ll gain peace of mind knowing that unless an inquiry is coming from your designated Realtor it’s probably a scam.

Scammers are relying on our inherent laziness and over-developed sense of entitlement to make a whole lot of money. These scammers would not be so successful if tenants weren’t looking to take advantage of far-below-market prices. Renters need to be proactive and do their homework before starting a rental search, and accept that their budgets may not get them as much apartment as they’d like. Landlords could help to prevent many of these situations by taking an active role in the marketing of their property. Overall, one must remember that not everything on the internet is true.

Rent safely, my friends. I’ll see you on Friday.

Print Friendly

2 Responses so far.

  1. teresa says:

    If someone rents a room on craigslist, is there any scams in hollywood on rooms for rent? an what can I do to prevent any unfair play?

    • Kay Cleaves Kay Cleaves says:

      I’m guessing you mean Hollywood, CA? Or maybe Hollywood, FL? I’m based in Illinois myself so some of the regional specifics will vary. The Craigslist rental scams are pretty universal across the country, though. I’ve seen the same stories of scammed renters pop up in pretty much every state in the US.

      As for scams pertaining to the “rooms for rent” section (instead of the “apartments for rent” section), I have heard of four different scams. One is that you pay to have your background check run and provide your personal data, and get your identity stolen. Another is that the prospective “roommate” is really a front to get you to sign up and pay for a dating site membership, as it’s sometimes tough to tell the difference between the questions a prospective roomie would ask and those asked by a potential mate. The third is the same scam as I described above – renting out space that they don’t actually own. The last one is subleasing without the permission or knowledge of the landlord.

      The same precautions apply for renting a room as they would for renting an apartment, with added concern that you should not only view the property in person but also meet in person all of the individuals with whom you’ll be living before you sign anything. Also bear in mind that credit reporting companies are pretty strict about who can pull a full copy of your background check. For a landlord to do so they usually require on-site inspections and special storage arrangements. If your roomie is pulling a background check you’ll need to find out what hands will be handling that information and how it’s being stored.

Hi! Please note that I'm no longer a licensed Realtor and I don't check the comments very often anymore. You're welcome to leave questions but be aware that it may be a few months before I see it. For faster response, please use the Contact page to email me your questions.

-Kay C.

Leave a Reply

Your email address will not be published. Required fields are marked *