The internet is great, right? Despite all the benefits the internet provides, it is also a prime environment for scams. If you are actively searching for a rental, it is extremely important to understand the risks and benefits of searching for one online.
A very common scenario for internet rental scams is falsely advertising a property (such as posting a rental that the person does not own or manage). According to CNBC Reality Check, up to 43% of potential renters have been exposed to scam listings for rentals and about 5 million people have been the victim of such a scam.
Here are a few tips to help protect yourself from online rental scams:
Know the Warning Signs
Common online scams include the classic ‘bait and switch.’ For example, you think you're checking out a property that is advertised, but it is not actually available. The scammer then attempts to push another rental (that is often more expensive) on you.
Another example to be wary of is the ‘hijacked ad.’ In this case, a scammer pulls 'for sale' listings from the internet and offers them ‘for rent,’ with the explanation that they were trying to sell but decided to rent instead. This second example is very easy to do since realty listings and extensive descriptions, pictures, and ‘tours’ are common tools in legitimate real estate sales! These schemes may even include attempts to collect deposits from multiple potential renters for the same property.
Mobile generations like Millennials and Gen Z are particularly vulnerable as they are increasingly likely to use the internet to search for listings. They are also accustomed to making their purchasing decisions based on descriptions and images they find online. And finally, watch out for scams which may exist even in legitimate rental offers: things like vague descriptions of available amenities that actually cost more once a contract or lease agreement is signed. Remember that once an agreement is signed it may be difficult and costly to get out of it.
Do Your Diligence
Any well-known property owner or management company has its reputation at stake, so doing business fairly is essential. Be sure to ask questions and review all documents to be sure you know what you’re signing. And, best case scenario: visit the property in person. Young people moving to a new city might consider a long-term stay rental property where they can reside while researching the new town. This way they can visit properties in person, get to know neighborhoods and make an informed decision about where they want to live.
If It Sounds Too Good To Be True…
Social media and internet search tools make it easy to discover rental and/or sharing opportunities, but having a keen eye for potential scams is crucial. Look for tell-tale signs such as very low prices, feeling pressured into signing an agreement, and an unnecessary sense of ‘urgency.’ “I have three people about to put a deposit down,” for example. Each of these tactics preys on one’s own need to have a place to live.
Nothing is guaranteed foolproof, but a good rule of thumb is to work with established management companies or reputable ‘finder’ services. These businesses will have a legitimate website, are reviewed online, and have professional staff who can assist you in your search for a rental property that best fits your situation. If you’re being relocated by an employer, be sure to take advantage of the relocation benefits they offer. This often includes a consultation with a relocation specialist which can make your move a lot easier than going it alone.
The best way to avoid a scam is to be aware and prepared. Research is key. Take advantage of the multiple resources available for you when looking for a place to rent. Knowing the signs that a potential scam is in play can save you time and trouble. Some of the schemes are very good, so keep a critical eye on offers that seem too perfect and too opportunistic to be real. And, to be on the safe side, always stick with a reputable company when considering a home rental.
CNBC Reality Check Ready to rent a home? Beware of these new scams