5 Signs of a Rental Scam and How to Avoid Them

Quick Answer

A rental scam is a scheme where someone pressures you to sign a lease or give a deposit for a rental that doesn’t exist or isn’t available. If you’re asked to rent sight unseen, or the rate for a place looks too good to be true, these are signs that you could be getting scammed.

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With rent up 14% over last year, according to Redfin July 2022 data, you may be desperate to find a deal if you're looking for a new place. Fraudsters can take advantage of that need by trying to lure you into a rental scam. Rental scams are intended to steal money from people who are looking for housing. The good news is that being aware of rental scam red flags can help you avoid getting duped.

What Is a Rental Scam?

Rental scams are schemes where someone attempts to defraud you of money under the guise of offering you a rental. The scam can be orchestrated in different ways, although the consistent theme is that a person posing as a legitimate landlord or property agent attempts to get you to sign a lease and send money. In reality, there is no rental, or the person who "leased" you the rental doesn't own it or have the right to lease it.

5 Signs of a Rental Scam

The following signs are red flags that a rental listing or rental agent is trying to scam you:

1. Rental Pictures Look Too Good to Be True

Chances are you've run into a property ad at some point that shows a beautifully renovated rental at a price that's well below the market average. If a listing looks too good for the price, it likely is. Always ask to see the property before signing a lease or paying a deposit.

2. Rental Listing Has Errors

Listings that have grammatical errors and other formatting errors may be created by a scammer. USA.gov says to look for inconsistencies in the text of rental ads—such as the overuse of uppercase letters—because these are red flags of housing scams.

3. You're Pressured to Lease Right Away

A legitimate landlord or rental agent will be accommodating when you want to see a space before renting it with your hard-earned money. If an agent is pressing you to sign a contract without seeing the rental, that should raise suspicion. The agent may not want to meet with you because the property is not actually for rent, or they don't have the authority to rent it out.

4. You're Asked for Money Upfront

A landlord or representative working for the property owner shouldn't charge you a fee to tour a property. If there is a fee, someone could be attempting to take your money and run. The Federal Trade Commission (FTC) notes that a request to wire money is a major red flag of rental scams. Money sent through Western Union or gift cards can be hard to reverse and trace, and that's why scammers use them as a payment method of choice.

5. There's No Credit Check Involved

Often, landlords and rental companies do a credit check before leasing a place to determine if a renter is creditworthy. While there are some places that might not require a credit check, you should be careful to vet the rental agent and ensure they're not taking advantage of your need for housing by offering a fictitious home with lenient eligibility requirements.

How to Avoid Rental Scams

Finding a new place to live is stressful, and you may be motivated to choose a place quickly to get situated as soon as possible. However, taking extra time to screen a rental can help you avoid getting swindled. Here are some ways to avoid rental scams:

  1. Always request a tour. Don't rent a home without seeing it. Schedule a time to tour the place to make sure it exists and confirm it looks like the advertisement.
  2. Skip listings that look suspicious. Scroll past spam listings and be skeptical of listings that are priced below market for the area based on size and upgrades.
  3. Ask to speak to the property owner. People posing as a representative of the owner could rent out a home without their permission. Asking to meet the property owner at the home could help you avoid a scam.
  4. Don't send money. Avoid sending money by wire even if the landlord comes up with an elaborate story as to why they can't handle the deal in person. If you're making a cross-country move, consider holding off on the house hunt until you arrive.

What to Do if You Suspect You've Been Scammed

If you suspect you've fallen victim to a rental scam and you've sent money by check or wire, contact your bank immediately to see if you can stop payment. Next, you can file a complaint with your local police station, the FBI or the FTC.

If you've given the scammer sensitive information about yourself, such as your Social Security number, consider setting up a fraud alert on your credit reports to get a notification if someone tries to apply for credit under your name.

Expand Your Rental Options by Building Credit

Working on your credit before applying for a rental could help you get approved for homes offered by legitimate companies so you can avoid having to fall back on sketchy apartment ads.

Steps like reducing your credit usage and making all your debt payments on time may help your score. Adding on-time cellphone, utility and streaming subscription bill payments to your credit report with Experian Boost®ø could also help you quickly build positive payment history.

Lastly, don't be afraid to speak up if you are scammed. Scammers are skilled at taking advantage of renters, and there's nothing to be ashamed of as a victim. Reporting the scammer could help others avoid their trap.