House Rental Scams are on the RISE!
I absolutely hate to say this but house rental scams are on the rise. Real estate based scams really make my blood boil. One, because it reflects poorly on the whole profession, and two, because it directly impacts people’s most basic need for shelter. It is not okay.
Anyways, since I can’t make all scammers stop, I decided I could share 5 tips to help protect you and your hard-earned dollars when it comes to detecting and avoiding rental scams.
If this is your first time here, welcome! If you’ve been here before, thank you so much for coming back and spending your time with me. My name is Lindsay and I‘m proud to be your Anthem, Arizona REALTOR® with the Wise Move AZ Team at Realty ONE Group. On our blog and YouTube channel we have a lot of fun talking about all things Anthem and real estate every single Thursday, and we absolutely love having you along for the ride.
House Rental Scams Take Many Forms
Rental scams can take many different forms and scammers always seem to be cooking up new ways to fraud people out of money. In general home rental scams seem to take one of two forms.
The first is a ‘hijacked ad’. This is when the fraudster lists a home for rent that may currently be for rent, for sale, or not on the market at all, and they don’t actually have any legitimate connection to the property. They are pretending to rent a property that they have no legal rights over.
The second is a ‘phantom property’. This is when the property doesn’t really exist. For example, they may try to rent you 123 Main Street, but 123 Main Street doesn’t really exist.
Money, money, money… or worse!
In either case, the goal of the fraudster is usually to get your deposit money or application money and then run off into the sunset never to be heard from again. In more insidious cases they may be hoping to get enough personal information from you to steal your identity. Either way, it’s super gross and upsetting.
So, if you’re currently looking for a rental or you’ll need to look for a rental in the future, let’s talk about what you can do to avoid falling victim to one of these scams.
Tip #1: Know Who You’re Talking To
Chances are you’ll start looking for rentals online. When you find one you like you will reach out to the contact person listed. Do they want you to call? Or will they only communicate with you by email or text? Who do they claim to be? Are they the owner of the property? A REALTOR® or Property Manager? Or someone else all together?
Verify the Property Owner
If they claim to be the owner, I want you to try and verify that. We live in Maricopa County, and here it is very easy to pull up the Maricopa County Assessors’ website, type in an address, and see the name of the current owner. It may be different or harder to track that information down in your area, but do some research and see if you can verify who the current owner of the property is. Make sure their name matches with the name you are being given by the person on the other end of the phone.
Verify their Agent
If they claim to be a REALTOR®, I want you to try and verify that too. In Arizona you can pop onto the Arizona Department of Real Estate’s website and look up an agent. You want to make sure they show up and that they are in good standing. If they aren’t listed or it appears their license is no longer in good standing, this could be a red flag. Do some more digging online to see if you can read reviews, check out their social media presence, and so on.
If they claim to be someone other than the owner or an agent, this could be another red flag. Ask them to explain their relationship to the owner and listen for any inconsistencies. If they claim to be an employee of a Property Management company, look that company up on the Better Business Bureau, or something similar, and then call to confirm that individual does in fact work there. If you can’t satisfy yourself that this person has a legitimate relationship to this property, I don’t think you should go any further.
Tip #2: Research the Address
If the person you are talking to checks out and doesn’t give you the creeps, that’s great, but it’s not enough. Some of the most dangerous scammers are insanely charming and seem super normal.
I also want you to dig into the address. If you are interested in renting a home the address should be made available to you right away. If they won’t give you the address… you guessed it, red flag.
Assuming you do have the address, look it up online. Are you finding the same rental listing in several different places? Do they all use the same descriptions and photos? If so, that is a good sign. Someone who genuinely wants to rent their property will likely advertise in several places. Someone who is trying to fly under the radar may not.
That’s right, cryptic, too good to be true, Craigslist Ad, we are talking about YOU.
For Sale or For Rent?
If the home looks like it’s for sale in one place but for rent in another, that’s a concern. It is not uncommon for homes that are actively listed for sale to become the target of these scams. Consider calling the listing agent and ask if they knew the property was also being listed for rent.
Do any prior rental listings come up for the property? Do the photos look similar? Again, here in Maricopa County we can use the Assessors website to see if a home is marked as a rental. Seeing that the property has a history of being rented could be a good sign. If this isn’t the case, don’t panic, it doesn’t necessarily mean that it’s a scam. It could mean that this is the first time it is being rented out. The true owner of a property would be happy to discuss that with you.
Tip #3: See it First
Please, please, please, if at all possible do not rent this home sight unseen! I know you’re excited and you’re anxious to get your new place lined up, but seriously, please don’t pay any deposits up front without seeing the home. A scammer will push you to make deposits quickly because they want you to believe that you will miss out on the home if you don’t make a deposit now.
Ask a Friend
If you can’t be there in person, see if you can have a friend, family member, or colleague tour the property for you. If not, you could consider hiring a local REALTOR® to assist you.
Seeing it in person doesn’t necessarily mean that it’s not a scam. Scammers have been known to break into vacant homes and offer them up for ‘rent’, including tours, while the owners are not around. That being said, if you see it in person, and the description and photos are accurate, it’s a good sign.
Vacant or Occupied?
When you see the home in person, I want you to pay attention to whether it is vacant or occupied. Is there furniture around? Does it look like someone lives there right now? If so, ask about it. When will they be vacating? When will the property be ready for a new tenant?
Safety in Numbers
Lastly, when you go to see the property take someone with you. You do not want to risk being alone at a property with a scammer or worse. Like my dad always told me, there is safety in numbers. That person can also be your voice of reason if the person you meet tries to insist that you hand over money to see the home.
Tip #4: Read all the Documents
Yes, rental documents are boring. Yes, I know you just want to hurry up and move in, already. But wait. I really want you to read all the documents provided before signing. Remember, unless you’ve enlisted the help of an agent, a lawyer, or some other professional, there is no one there looking out for your best interest other than you. The seller or the Seller’s agent only represents the Seller’s best interest. Typically the rental documents will include the following
- Lease Agreement
- Application Form or Authorization for a background check
- Other supporting documents or addenda
Make sure the true property owner is listed on the lease. You do not want to sub-lease the property from someone else. It is almost impossible to verify that they have any rights to the property. Leases can be faked and signatures can be forged. Make sure you are renting directly from the property owner. It’s okay if they have a property manager as the intermediary, but make sure they are reputable.
Make sure you know what they are doing to ‘vet’ you as a tenant. A good Landlord wants to make sure they are getting a reliable tenant, not just the first person who responds to their ad. If you ask what their process is, including how they will be comparing applicants, and they don’t have a convincing answer, it is a red flag.
Tip #5: Don’t Rush
You might be thinking, seriously?! Doesn’t Lindsay know that if I don’t lock this property in right now it might be gone. Yes, I do! I work in this crazy, frantic market all day, every day. I feel your pain. But you know what’s more important? That you don’t get taken advantage of.
The Perfect Storm
Scammers prey on people who are in vulnerable situations. They want to create a sense of urgency, they want to take advantage of a market that is already crazy, and they want to strike when emotions are high. It’s the perfect storm.
I know how scary it can be looking for a place to rent. When I moved to Vegas to go to school, I literally drove there with no place to live, a few nights booked in a hotel, and all my belongings in the back of the car. I know how tempting it is to sign a lease before you get there sight unseen, or to sign at the first place you find, but please don’t rush.
If the Landlord is putting pressure on you to sign things quickly or to hand money over quickly, it should set off some alarm bells for you. If rent seems lower than average for the area, you should be cautious. You may miss out on a few properties because you had a bad feeling, that’s okay! There will be others. I am a firm believer in trusting your instincts.
Remember that you need to be comfortable with the Landlord or Property Manager. They are going to be your point of contact if something goes wrong after you move in.
So, there you have it! My intention with this video wasn’t to scare you, but rather to give you a few more tools in your toolkit to sniff out a scam and save your money. These scams break my heart because I know how devastating the loss can be for individuals and families trying to move.
Landlord Tenant Act in Arizona
If you will be renting in Arizona, I strongly recommend that you read the Landlord Tenant Act, here. This will help you to understand your rights and obligations as a tenant, and to understand the rights and obligations of your landlord.
Enjoy those and I’ll see YOU next Thursday!