Imagine, if you will: you pull up at your appointment to show a vacant home you have for lease. To your surprise, you find a strange car in the driveway. Then, someone is standing in the living room with their moving cardboard boxes. You have no idea who this stranger is but, they claim to have rented your home from someone else. What happens now, and how do you prevent this from happening again?
A fake rental scam is when a prospective tenant rents a home from someone who has no right to do it.
Rental scams happen all the time, and it is a huge problem. Scammers gain access in multiple ways. They may game a lockbox or even go as far as breaking in and change the locks. These con artists are always coming up with new ways. They will usually create advertisements on Facebook, Craigslist, or other portals that are not real estate oriented. The only thing that does not change is that this practice hurts both landlords and prospective tenants.
From the scammed renter’s point of view, it can be devastating. These victims tend to be people who are least able to absorb the loss. They typically have limited funds and or less than perfect credit.
Prospective tenants – here are four signs that the rental you are looking at might be a scam:
- If you are not required to sign a formal lease agreement.
- If you are not required to fill out an application, provide identification, or have your credit pulled.
- If the rental price is unusually low.
- If it is too good to be true.
The best practice is to never hand over your money to anybody if it seems too good to be true.
Check out who you are renting from. A property management company may be safer, but you still need to check them out. Do they have a physical address, a website, and a phone number you can call? Are there reviews on Yelp or Google to check out?
If you are renting from a private party, verify they own the property. Ask them to show you a driver’s license, and utility bill. You can also ask a Realtor® to look up the owner. It’s easy to do. If the landlord feels offended when asked for references, it might be a red flag.
Landlords – here are five tips to help prevent this from happening to you:
- Have your name and contact information on the property. It will help potential tenants know who they need to rent from. Plus, if you see your information taken down, you will know the property is probably targeted by scammers.
- Personally attend each showing or prescreen tenants with picture IDs before allowing remote access with a temporary lockbox code. Avoid using combo boxes that repeat or use the same combination for each showing.
- Monitor vacant properties. Check that your info is still there. Check that the property is secure, and your keys still work. Check that nobody is there who does not belong.
- Be on high alert if you start receiving calls about a property you have for lease, except people think it is going for way less than you are renting it for. That is a sure signed that the property is a target.
- Make every effort to fill vacancies quickly. The quicker they fill, the less exposure you have.
Even if you are vigilant, it is still possible to find a scammed tenant on your property. If that happens, you must act quickly to let them know they are, unfortunately, scammed. Be firm but understanding. If they do not get out, you need to call the police for trespassing.
Sometimes the police will not treat this as trespassing and call it a civil matter. Then as a landlord, you will have to pursue an eviction. As wrong as this seems, this does happen. This is bad for the landlord, but also results in the tenant getting an eviction on their record, making it even harder in the future for them to find a place to live.
One of the best practices, if you get scammed, please call the authorities on the scammer. It is going to take more than one victim reporting this crime to make a difference.
It may seem like a lot. Still, having a rental property is a great investment. Rental scams are just one of the things we handle as property managers. At the Mike Dunfee Group, we would be more than happy to talk to you more about the process.
Dunfee Real Estate Services
DRE # 02026232