scamsRental scams only succeed because people become vulnerable when they believe they are getting a great deal.  How to avoid a rental scam requires a deep breath and self-questioning..before handing over any personal information or cash.  Rental scams are focused on obtaining cash or identity theft so those are what the scammer is coming after.
The scam starts with a vacant home.  These are usually well maintained, easily habitable homes.  The scammer either through an acquaintance, or by misidentification obtains the lockbox code on the home.  Or, if they are skilled with locksmith tools, simply break, enter, and re-key.   I have seen these scams where a “For Rent” sign is placed in the yard or where our real estate sign has been removed.  We have then been able to find the home advertised for rent on free sites such as Craigslist.
The most obvious scam involves the rental ad and the person posting the ad asking for funds wired to him for a security deposit and rent.  The more realistic scam involves the scammer meeting a prospective tenant at the home, showing the home, and asking for a cash deposit and first month rent.   In some cases, a fake credit application is taken and enough information (social security, drivers license number, addresses and phone numbers) is given that the value for identity theft far exceed the cash obtained in the scam.
At some point, the actual owner finds out somebody has moved into their home.  By then the scammer has moved on.  The potential tenant is left without cash, possibly with a stolen identity, and the costs of moving again.  It is a very sad situation.
How can you avoid these rental scams?   Most landlords will do certain things that are not typical of a scammer.

  • Owners do not want cash.  They want traceable funds such as a cashiers check or money order.  If payment seems like the top priority (even insisting on payment prior to showing the home) this is a sure sign of a scammer.
  • Also, did you know you can check the public records for confirmation of the owner’s name?  This is helpful if you are dealing directly with an owner and not a property manager.  If the party you are dealing with claims to represent the owner, and gives an excuse like the owner will send you the keys-a light bulb should go on that something is not right.
  • Or, if the only representative you deal with, claiming to be the owner, is only available on-line.  Some scams also involve pulling on your heartstrings and the owner will claim to be a missionary, Reverend or a Dr.   You might want to check that out further.
  • The most common way I have become aware of a property we manage being involved in a possible scam is receiving an inquiry that asks why our property is listed for rent for 25% less on Craigslist than Zillow.  I am not picking on Craigslist but due to the free and easy access, if you see a property for rent (or even sale) on that site it needs to be confirmed.  Confirmation can occur by typing the address into other sites or asking a local Realtor to do some checking.
  • A property manager will have you come to their office and execute documents and that is where funds will change hands.  The funds will never be cash and a simple internet search will confirm the manager’s reputation.
  • Ask a lot of questions of the representative and assess their answers and how they provide them.  Questions include how is maintenance handled?  Where do I send my rent?  What if my heat goes out in the middle of the night?  Experienced landlords and managers have these answers.

If you ever encounter what you believe to be rental fraud or a scam, immediately contact the authorities.  Become part of the solution so that others may avoid a rental scam perpetrated by this criminal.

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WILMOTH Group is headquartered in Indianapolis, Indiana and Fort Myers, Florida. We focus on providing creative local solutions for a variety of residential real estate needs including, properties for sale, property management services in Indianapolis, and short-term management services in Tampa and Fort Myers.

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