We are hearing more and more about rental scams! In many metro areas of Texas, there is a shortage of rentals compared to the number of people that need rental housing. The overall shortage of rentals has caused rent rates to rise, so finding apartments within budget is often difficult. Most people surf through online rental listings to find apartments and other rentals that fit their needs. This would be great if every listing online were LEGITIMATE, however, many online rental listings are FAKE. Recent reports show there are many fake rental listings on apartments.com, Zillow, craigslist, etc. Basically, anywhere a scammer can post an ad for free or at a low cost they will do it! The scammers realize there is a lot of money to be made in this kind of market. They hit fast and hard and then they disappear with your money! We don’t want to see anyone get scammed out of their hard-earned money! So, we prepared an ultimate list of rental scams to be aware of and how to avoid them! SCAM #1 - Fake landlord/owner
This is the one scam we keep hearing about on the news because of the significant money lost. It is typically a “for rent by owner” scam and plays out like this. Tiffany Tenant is in desperate need of a 3-bedroom rental. She can’t find any 3-bedroom rentals in her desired area and in her budget that has availability for her move date. Tiffany Tenant searches online ads for hours and finds a nice 3-bedroom home for lease and calls the number in the ad. Larry Landlord answers and informs her YES, it is still available. Excitedly, she asks for a tour! He informs her someone still lives in the home so it cannot be viewed inside, however, she is welcome to drive by it and get a feel for the neighborhood. He then texts her more pictures and a short video of the inside. Tiffany Tenant drives by and falls in love with the neighborhood, the price is unbelievable, and she wants to apply! Larry Landlord makes it so EASY to apply, a short application is sent to fill out over email and the app fee is paid via Venmo. Tiffany Tenant is approved for the lease very quickly and is then asked to submit the deposit, again via Venmo. Larry Landlord says the home will be ready on the 1st to move in and he will meet her there to sign the lease and hand over the keys! She will need to bring the 1st month rent in the form of a cashier's check. Tiffany Tenant is so happy and begins to pack! Two days before the 1st, Larry Landlord calls Tiffany Tenant and explained he had to rush out of town for a family emergency! He assured her she can still move in on the 1st. They just need to do things a little differently. First, he is going to send her the lease for an eSignature, next she can pay the 1st month’s rent via Venmo and then he will Fed-Ex overnight the key. Larry Landlord texts her a picture of the Fed-ex label and says he will drop it in the Fed-ex slot as soon as the lease is signed, and the 1st month is paid. Tiffany Tenant e-signs the lease and pays the rent via Venmo. The key NEVER arrives. Tiffany Tenant can’t reach Larry Landlord. Then without notice his number and email no longer work. Larry Landlord is a big-time-slick scammer who may have defrauded numerous people out of thousands of dollars on this one fake listing. How to Avoid: It is best to not deal in CASH, wire transfers, or other mobile ways to send money. Ask to meet with the owner in person - even if the property can’t be toured, ask for the owner’s ID. If they are legitimate, they will not have a problem showing you their driver’s license. Then check the County Property Tax Records to verify ownership. If the name does not match the owner of the property address, proceed with extreme caution. ***Beware! Some scammers fraudulently gain access to a key box code and may give it to you to access the key and see the home! You always want to verify ownership if renting direct from an owner! SCAM #2 Application fee con This con is where a scammer posts fake listings just to collect non-refundable app fees and sometimes deposits. They could pose as a landlord, leasing agent, locator, or a real estate agent. They typically copy-cat legitimate expired listings and reduce the price. They operate FAST, they may say whoever applies first and submits the app fee will have first dibs at it. They typically make the app fee affordable, usually $25-$50. Their goal is to collect as many app fees as possible in a short period of time before erasing their trail. How to avoid - if the rate is low compared to other similar listings is the biggest red flag. Keep in mind scammers reel people in with lower-than-market value rent rates to instill a sense of urgency. It can be VERY tempting to want to apply immediately before someone else does. If the person who posted the listing responds to your inquiries by urging you to apply NOW, THINK first. SCAM #3 Second Chance Scams There are numerous scammers that prey on people with leasing challenges such as broken lease, eviction, criminal background, etc. These scammers know how hard it is for people with background issues to lease. The scammer may pose as a landlord, realtor, locator, locating company, co-signing company, etc. They almost always ask for money upfront. They may charge you for a list of second chance apartments. They may ask you to pay upfront to apply to have a co-signing company sign your lease. They may “guarantee” application approval. How to Avoid: For one, if someone “guarantees” application approval - that should be a RED FLAG. Legitimate landlords will want to evaluate your ability to pay rent and verify you meet their rental criteria and will NOT "guarantee" app approval. Two, never pay anyone posing as a real estate agent/locator for a list of second chance apartments. In Texas, locators are required to have a real estate license, they are paid by apartments when they refer someone who signs a qualifying lease. I do not know of any licensed real estate agent/locator that charges a fee for a second chance apartment list. Three, beware of any fees paid upfront! Many times, they are small fees $25, $30, $40 since it is easier for scammers to get small amounts of money from more people than it is to get a large amount. Plus, it is less likely someone will go to the police if they are scammed out of a small amount. Protect Yourself from SCAMS - Do Your Research The easiest way to avoid rental scams is to hire a licensed real estate agent/locator to assist you. In Texas, real estate laws state that tenants' can hire a licensed agent to assist with finding rental properties. Most if not all, licensed agents will not charge you anything as they are compensated by landlords/apartments for referrals that sign a qualifying lease. Licensed professionals can search for rental listings on locator databases that the PUBLIC can't post listings on - this means scammers can't post listings!
If renting direct from a private owner, prior to renting make sure you do your homework and run basic research on the internet — you can start with googling the landlord’s name or rental agency, an email address, property address, etc. Verify ownership before spending money. Check online presence and reviews, many scammers have little to no social media presence or reviews, because they change their contact info so often. The scammer may also be an imposter - faking they work at a legitimate real estate office, apartment office, locating company or co-signing company. Does their email match their company’s website domain name or are they using a free email account like Gmail or Yahoo? If they claim to work at an established reputable business, they should have a business email address! Bottom line to avoid rental scams: TRUST YOUR GUT FEELING and don't act on impulse. What to Do If You Have Been Scammed
Hopefully, this is all the information you may need to help protect you against scammers. Sometimes even the most careful person may become a victim of rental fraud. There are a few simple steps that you should consider taking if you are defrauded in a rent scam.
Call the police and give them all the details: texts, emails, lease agreement, listing, etc
Quickly report the listing to the website you found the listing on (apartments.com, Zillow, craigslist, etc) You could save the next victim!
Call the Federal Trade Commission Consumer Response Center toll-free hotline: 1-877-FTC-HELP (1-877-382-4357)
Need help finding your next apartment? We would love to assist you! We are licensed real estate agents that specialize in apartment locating - we can even help locate second chance apartments. Start your apartment search today!