How To Identify and Avoid Rental Scams

Michael Davis
Published Aug 23, 2024

As rental costs rise and affordable housing becomes more scarce, scammers are taking advantage of the situation with innovative rental scams. These scams come in various guises, but they are all designed to separate renters from their hard-earned money while providing nothing in return. Falling for one of these scams can be financially devastating, so it is best to know what to look out for so you don't become a victim. Here are some of the top rental scams circulating today and how you can avoid them.
 

Rental Listing Hijacking


With a rental listing hijacking scam, the scammer takes a valid rental listing ad and modifies it by changing the contact information. They then post the modified ad on another website, knowing that interested parties will be contacting them instead of the actual owner or property management company.

To avoid this scam, type the address of the property you are interested in into a search engine and see what pops up. If you see the same property listed multiple times but the contact information on them varies, it may be a red flag that a scammer is involved.
 

Phantom Rental Listings


Sometimes scammers make up ads for rental properties that don't exist with the sole aim of getting potential renters to pay them money before they have seen the property. They may use the excuse that the owner lives in another state or are on business out of the country to avoid having to show the property in person. Another common tactic is promising to provide you with a key to inspect the property after you have sent them a security deposit.

The easiest way to avoid this scam is to never send money for a property you have not physically been in. Reputable property owners and property management companies would never ask you to send money without seeing the property first.
 

Wire Transfer Scams


Another common way criminals take money in rental scams is to ask the potential renter to wire money instead of using a personal check or other forms of payment. This is because wire transfers are treated like cash and once you send it, you cannot get it back. It is also easy for wire transfer recipients to misrepresent who they are, so you'll have no idea where the money really went or who has it.

If you are paying an application fee, security deposit, or first month's rent for a new rental, pay with a personal check. There are protections in place if you pay with a personal check and then find out that you have been scammed. You can stop payment on a personal check by calling your bank and notifying them that the check should not be honored.
 

Pay Before You Sign Scams


If the person claiming to own or manage the property asks you to pay a security deposit or rental payment before you have signed a lease, it is a clear red flag that you are being scammed. A lease is a legal document enforceable by court order and scammers don't want you to have a document that proves they were lying to you. On the other hand, reputable property owners and property management companies want you to sign a lease so they are legally protected during your time renting the property.

While it is okay to pay an application fee for the property owner to do a background check and credit check, you should never pay a large sum of money before signing a lease. If the property owner is reluctant to provide you with a lease signed by all parties, take your money somewhere else and cease all communications with that property owner.
 

Incomplete Lease Scams


While this scam is rarer than the others, it is still something to watch out for. With incomplete lease scams, the entity renting the property provides a lease to the renter with incomplete information or gaps in the lease to be "filled in later" by the property owner or property management company. If they can get you to sign, they can change the lease later without informing you as your signature will still be technically valid.

When you are ready to sign a lease, go over it carefully to ensure that the lease says what you have agreed to. If there is missing information, ask for that information to be filled in and ask for a copy of the completed lease as proof of what you have signed. If they are unwilling or unable to provide the information and a copy of the lease, politely decline and look for a different property to rent.

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