Rental scams are as old as the landlord-tenant relationship. The oldest most common scams were landlords keeping the security deposit, but now with the spread of technology, the opportunity for fraud has never been greater. The most current and frequent rental scam is people with no legal right to lease a property, leasing it to a potential tenant and making off with deposits and rent. Another common fraud practice taking shape right now is charging multiple potential tenants fees for background checks and taking off with that money, which can be significant. Preventing many sophisticated scams can be hard, but here are 12 tips that can help minimize your risk.
- Never Deal In Cash: Always make sure to leave a paper trail. Also avoid wiring money to anyone.
- Demand A Written Lease: Oral leases are valid in some states, but can be potentially problematic. As a tenant, demand a written lease and a signed copy. Get everything in writing to lay out the responsibilities and rights of both parties.
- Never Rent Sight-Unseen: Absolutely see the place before signing a lease or transferring funds. Not only does it prevent fraud, but allows you to see the pre-existing condition of the space you’re about to rent.
- Meet The Landlord In Person: Some scammers will readily meet tenants in person, many, especially ones who operate out of the country, will not. Many out-of-town landlords are legit, but insisting on a local landlord or property management company will make fraud less of a thing and this can also lead to a better service relationship in the long run.
- Talking With Current Tenants: Occupied properties are far less likely to be fraudulent. If there is a chance to speak with the current renters it may be in your best interest.
- Make Sure The Lease Identifies the Owner and/or Agent: Also take note of the lease in making sure it discloses information for a person who is authorized to receive notices and services. Double check the owners/agents addresses too. Make sure the address is not the same as the listed property or a PO Box.
- Identity Of The Actual Owner: Looking in from a tenant’s perspective it’s not always easy to determine who is authorized to lease a property. You should be able to do minimal research in county records. The owner’s identity should always be available unless it is a Land-Trust. That requires a little more work.
- Conducting Basic Research: Good Old Google. Take some time to do a Google search. Google the address, owners name and Management Company. You can also dive into property records and find out of it has ever been foreclosed on or sold to a bank. Both should be avoided, as these are targets for scammers and poor management.
- Be Aware Of Market Rates: Pay attention to housing market trends. The market for rentals is especially hot in the summer so beware of any deals being offered at far below market rent.
- Watch Out For High-Pressure Sales Tactics: Even though a landlord may have many potential applicants, be wary of anyone who attempts to get you to sign or lease, or hand over a substantial amount of money, right then and there.
- Use A Licensed Real Estate Agent: Having an agent represent you is a significant safeguard because it is less likely that a scammer will list a property with an agent and if you do fall victim, you can hold the agent responsible.
- Avoid Sub-Leasing: It is extremely risky for all parties involved. If taking over a lease is what you desire, work with the landlord to terminate the old lease and sign a new one directly with you.
In hindsight; be proactive. Be aware, and be proud. It’s your hard earned money being vested here.