How can I avoid rental property scams?

Note:SparkRent is a service that is only supported in the Unites States of America. Landlords have to be USA residents who rent property within the USA. 

 

Here are a few tips for avoiding typical rental scams. 

Rental Property "Landlord" Scam:
The ad for the rental property and email reply seem honest and possible: a landlord has left town on a trip and is looking to rent their home. When the potential tenant asks to view the house, the owner says he has the keys with him in a foreign country and asks that the deposit and rent be sent to him via Western Union or wire transfer before he'll mail the keys. Don't do it.

The scammers will generally copy real ads and real photos of actual rental properties or homes in attractive neighborhoods and pretend to be local owners. They significantly lower the rental prices and post them on other websites, replacing the owner's contact information with their own. The actual homeowners are unaware their home is being used to commit fraud.  

In situations where you cannot personally visit the rental property because you are not located in the city of the rental, never send money via wire transfer, cashier's check, Money Gram or Western Union.  Only a credit card has fraud protection.  If the landlord can not accept a credit card, you can use PayPal to make payment using your credit card.  If the landlord will not accept PayPal, look elsewhere. Don't risk the chance of being taken in a scam.


Rental Property "Tenant" Scam:
Tenants can also be scammers.  Landlords need to be on the lookout for the following popular tenant scam.  It begins by the tenant finding a rental property on popular classified ad websites.  The scammer will usually contact the landlord by email.  These emails usually have poor spelling and grammar and come from a free email account such as Yahoo, Hotmail or Gmail.  These emails usually come from scammers claiming to be doctors or reverends. 

The landlord replies with information about the property.  The tenant usually says they are out of the country and would like to rent the property, sight unseen.  They send a fake certified cashier's check or money order.  The cashiers check or money order is for an amount much greater than the deposit and first month's rent.  The scammer says they made a mistake and asks the landlord to send the overpayment back to them.  It usually takes several days for a bank to recognize a cashiers check or money order as being fake. 

The unsuspecting landlord thinks the money is already in their bank account so they have no problem wiring the excess money, usually $1,000 to $2,000.  The scammer receives the funds and the landlord receives a call from their bank that the cashiers check or money order was fake.  The scam is now complete and the landlord has just lost a large amount of money.

 

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Comments

  • 4b1c5f813ee2af316fb51da75cf1e05c?default=https%3a%2f%2fassets.zendesk.com%2fimages%2fframe_user
    Hagrinas Mivali

    This strikes me as very bad advice. What you suggest to do to verify the legitimacy DOES NOTHING.  When I rent a unit to somebody, I run a credit check. As a formality, I ask for photo ID to verify that the person whose credit I checked is the same person who is in front of me. I've never once had a tenant ask to see my ID. But they should ask me and there's a good reason.

    Here's the way a scammer can get  around everything you said a tenant can do to be cautious.  The scammer finds an attractive house and rents it. The scammer then sets up a bank account. The scammer advertises the same house for rent at a very attractive price. People show up, see the house, sign leases, leave security deposits, and pay the first month's rent. They are told to show up on a certain day at a certain time to get the keys so they can move in. When that day comes, dozens of tenants  show up, each asking where the landlord is. Soon they find that everybody there expected to move in. When they find the actual landlord, the landlord has a lease with somebody who is long gone, The checks have been deposited and cleared. The "landlord" who rented the property to all these people has moved on to a new town. The real landlord is faced with the task of potentially evicting a person who isn't even late on the current month's rent and who doesn't even exist. It could take months before the landlord has the legal right to rent out the apartment, and it might take a lawyer to prove that the real landlord never rented anything to these other people.

    So that's why it's VERY important for a landlord to identify not only the credit worthiness of a potential tenant, but also get references from previous landlords. Look up the number of the reference property managers in the phone book. Don't go by what's on the application. It could be a prepaid cell phone. And make sure to get a valid photo ID to assure that the person whose credit you checked is really the one who is moving in. If you are the prospective tenant, make sure to check the photo ID of the person who is having you sign the lease. You should be able to take the name and address in the lease where payments and notices must be sent and use that to find out if it's legitimate and if the person whose ID you saw was related to that entity. 

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