If a Zillow or Craigslist apartment listing sounds too good to be true, it probably is.
Rental scams are becoming more common as bad actors take advantage of people desperate to find affordable housing.
A New Bedford, Massachusetts man was charged in September for allegedly scam 15 people on $22,050 false rental deposits. Most fraud victims lived in Spanish-speaking and immigrant communities and were looking for affordable housing.
Nationally, 11,578 people reported losing more than $350 million to rental scams in 2021, according to the FBI. This is a 64% increase over the previous year.
Here’s how to spot a scam and protect yourself.
How do rental scams work?
Scammers often take real rental listings of properties for sale or rent and repost them at rock bottom prices.
Hacked property listings use a real address but replace the contact information with the scammer’s email and phone number.
Other scammers use the real name of the owner or broker to create a fake email to make the scam more convincing.
Scammers pressure potential applicants to send money immediately, usually in the form of a deposit or an application fee, to retain ownership.
But when it’s time to schedule a visit or collect the keys, the supposed “owner” is nowhere to be found.
5 ways to avoid rental scams
Our general advice: if you can’t meet in person, see the apartment or sign a lease before transferring money, keep looking.
Here are five ways to protect yourself from rental scams.
1. Analyze the ad
If the price of this spacious downtown loft seems too good to be true, it might be.
Scammers often advertise fabulous rentals at bargain prices to attract as many applicants as possible.
Check the spelling and grammar of the ad. Ads with grammatical errors or odd verbiage are often telltale signs of fraudulent postings.
2. Dig into the details
First: Google the address to make sure the location exists.
Next, do a Google search for the owners, realtor, and/or property management company. See if the rental company has bad reviews or warnings that they might be involved in a scam.
If you find the same ad listed under a different name on another website, that’s a red flag.
3. See the unit in person
Sending money to someone you’ve never met in person for an apartment you haven’t seen is never a good idea.
If you can’t visit an apartment in person, see if a friend or family member can do it for you.
Be sure to meet the manager or real estate agent at the unit. If they don’t have the rental key (for whatever reason), it’s time to beware.
Do you live out of town and can’t visit the property in person? Set up a video call. Make sure they give you a full tour and don’t let them rush you on the phone.
4. Think before you come
Scammers will often demand a security deposit, application fee, first month’s rent, or vacation rental fee to “reserve your spot.”
You might be tempted to send money if you live in a hot real estate market and your lease is about to expire. But seriously, think twice.
Once you hit send on payment apps like Zelle, Venmo, Cash App, or PayPal, you’re almost gone. It can be difficult, if not impossible, to get your money back once you realize you’ve been scammed.
Also never pay with bank transfers, cryptocurrencies or gift cards. If someone tells you to pay this way, it’s a sure sign of a scam.
5. Don’t accept excuses
Don’t let anyone force you to send money before you can view the property in person.
Scam artists can come up with a long list of reasons why they can’t show the apartment until you deposit your hard-earned money.
They’re out of town or out of country, that’s a big deal.
Be skeptical if the poster encourages you to drive-by instead. Looking through windows is not the same as taking a tour. The current owner may not even know that their home is listed as a rental.
If the poster shows up for rental, make sure she has the keys. Don’t settle for “I’ll change the locks”.
How to report rental scams
If you spot a suspicious rental position on a site like Zillow or Craigslist, report it directly to the website.
If you are the victim of a rental scam, immediately report any transfer of funds to your financial institution. You should also report the crime to your local law enforcement agency and the Federal Trade Commission.
You can also file a report with the FBI Internet Crime Complaint Center.
Rachel Christian is a Certified Personal Finance Educator and Senior Writer for The Penny Hoarder.
This was originally posted on The Penny Hoarder, which helps millions of readers around the world earn and save money by sharing unique job opportunities, personal stories, giveaways and more. The Inc. 5000 ranked The Penny Hoarder as the fastest growing private media company in the United States in 2017.
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