Nearly 27 percent of Americans rented their homes in 2016, according to Statista. That statistic speaks volumes about the growing presence of rental properties and active tenants throughout the country. However, it also shines a spotlight on the growing presence of scams and scandals involving criminals and frauds that strive to turn those tenants into victims.
It is possible to drastically reduce your risk of becoming exposed to rental property scams if you know what to look for and how to avoid these traps when they emerge. You can use the guide below to avoid those traps and to help others protect themselves in the same way.
How to Detect a Rental Property Scam
There are a number of “red flags” that should be viewed as indicators to abort the conversation as quickly as possible and possibly even report the scammer to the authorities in extreme cases. Two issues in particular to watch out for include:
- “No Background Check Necessary”: Even the nicest landlords in the world will still insist on completing background checks on potential tenants to ensure they know exactly who they will have living in their home. If the landlord or property owner seems eager to get you the keys without checking your financial stability or background, you should view this as a clear indication of fraud.
- Wire Transfers and Rushed Signatures: If the alleged owner or landlord requests that you wire the first payment or deposit to them instead of paying with cash, check or money order, it is probably a scam. In addition, if they seem as if they are overly anxious to get you to sign a lease as quickly as possible, you should view this as a telltale indicator of a rental property scam.
How to Avoid Potential Scammers
As you approach each rental property owner or landlord, you can avoid becoming victimized by a rental property scam by making sure you do everything “by the book” and insist on being provided with details and documentation every step of the way. Do not hesitate to ask them for their own identification and credentials to verify their own legitimacy.
Below is a list of other helpful pointers to keep your family (and your finances) protected from rental property scammers:
1. Demand a Lease in Writing: Oral leases or “handshake agreements” should never be accepted exclusively. You should always get some type of documentation to outline the details, conditions and validity of your lease agreement.
2. Consult an Attorney to Review All Documentation: Before you sign the lease, make sure that you consult with a licensed attorney who specializes in real estate and/or landlord-tenant agreements. In addition to making sure you are protected, the attorney can review the verbiage of the agreement but also do a little more investigation into the actual listing to ensure that you are not being set up by a scammer.
3. Encourage Face-to-Face Interactions: One of the quickest ways to identify and avoid a rental property scam is to demand face-to-face interactions. As referenced above, most scammers bank on never having to see their victims. They may insist on communicating via email, online listings, Craigslist and wire transfers. By demanding to handle all business matters face-to-face while researching the legitimacy of the listing, you can rest assured in knowing that you are not being victimized by a rental property scam.
When you are renting a new property, the last thing you want is to be scammed by a landlord. It is important to protect yourself by knowing how to spot a scam, as well as taking steps to prevent a scam from ever taking place. And always be on the lookout for more tips that will save you in the future.