Insights from Jonas Bordo, CEO and cofounder of Dwellsy
If you’re looking for a place to rent, you need to know how to avoid scams. According to a 2022 Dwellsy survey, 44 percent of respondents said that they or someone they knew had personally lost money due to rental fraud, with the average renter losing $2,890. (Yikes!) Especially as a first-time renter, you don’t have that kind of money to lose.
The primary threat to renters is the “fake landlord scam.” As the name suggests, a fraudster poses as a landlord, often stealing a legitimate listing and reposting it. Usually, all that’s changed is the rent price (which is now less expensive) and the contact information.
When a renter reaches out, the scammer tries to capture their information—including social security and driver’s license numbers—through a seemingly normal rental application. They’ll pressure the renter to send a deposit—typically first and last month’s rent and/or security deposit—before seeing the property. Then the scammer disappears, never to be heard from again. Meanwhile, not only has the renter lost a lot of money—they are also out of a place to live.
If you’d like to avoid that scenario at all costs, read on for eleven important rules to follow when searching for your next rental:
Use a safe search site when browsing rental listings. Avoid unbranded rental listing sites and sites that allow users to post anonymously, such as Craigslist—these are heavily utilized by scammers. Sites that charge landlords a fee to post a property aren’t always as dangerous as unbranded sites, but most operate on a “buyer beware” basis. (In other words, you’re on your own when it comes to avoiding scams.) Dwellsy is unique in that it allows landlords to list their properties for free—but it also actively works to be a fraud-free space by verifying each listing. Before listing a property, landlords must go through a multi-step authentication process. Users can also subscribe to Dwellsy Edge ($29.99 per year), which offers a SafeSearch warranty providing up to $2,000 of fraud protection, among other rental search perks.
Keep an eye out for duplicate listings. Since many fraud agents hijack real ads, coming across two or more listings for the same property is a major red flag. If it’s hard for you to determine which listing is authentic, pass on both and look for a new one.
Check the landlord’s online credentials. If your potential landlord is an individual, chances are they’ll have an online presence: a LinkedIn profile, a Facebook page, an Instagram account, etc. Make sure these profiles match up and make sense for who the person is. If your prospective landlord is a company, then they should have a website, a social media presence, and may belong to a local trade association or have a Better Business Bureau rating. Unlike legitimate landlords and companies, scammers either have no online presence or one that’s chaotic and confusing.
Tour the property—either in person or virtually—and meet the landlord. Scammers are notorious for not letting the renter see the property before signing the lease. You have a right to tour the unit in person, with the listing agent, before committing. No matter how sincere a landlord’s “I’m too busy!” or “I’m out of town!” excuses may seem, a persistent refusal to let you visit the rental should set off alarm bells. Never send money without touring the inside of a property and meeting the landlord or their representative. If you’re relocating to a new area and can’t travel for an in-person tour, ask for a live video tour (not a pre-recorded one!) from the agent or owner.
Don’t give in to “pay right now!” pressure… In rental listing scams, fraudsters often pressure renters to send money very quickly—often before you have a chance to tour the property. While real landlords may let you know that you could lose the place if you don’t take action, they rarely use hardball tactics to close the deal because there are multiple interested renters.
Be wary of significant discounts… Another common fraudster tactic is to offer steep discounts of 20 percent or more on ongoing rent if you make quick up-front payments of first and last month’s rent and/or the security deposit. Since the scammer knows you’re never going to move into the place and they’re not going to collect rent on an ongoing basis, they won’t lose a dime. Real landlords rarely, if ever, discount the rent (and if they do, it’s because you negotiated it).
…And be especially suspicious of rent that’s too good to be true. Unfortunately, fraudsters target people who are looking for more affordable housing, making cash-strapped first-time renters a prime target. If a listing is significantly below market value—especially if it’s 20 percent or more lower than what you think it should be—chances are high that it’s a scam.
Safeguard your personal information. Most legitimate landlords require you to provide sensitive information like your social security number, driver’s license information, income, and more. Scammers know you’re expecting to provide this info so they’re quick to ask for it (even if you don’t take the fake-rental bait, they can still steal your identity). Beware of anyone asking for this kind of personal information very early in the process. When they do ask, make sure they have a professional process for submitting it, preferably a secure online application system.
Avoid paying via Venmo and Zelle. Online peer-to-peer payment methods like Venmo and Zelle are convenient—but they’re also one-way payment tools. If fraud is discovered, you have no way to recover the payment without the cooperation of the recipient. If a landlord wants you to Venmo your deposit, ask to pay by credit card or check instead. These payment methods allow you to reverse the charges or issue a stop payment. Once you’ve moved into your rental and established that it’s legitimate, then you can start using Venmo.
Exchange your first month’s rent for keys. After touring a property, it’s common to sign a lease and pay a security deposit to hold your spot. Do NOT pay the first month’s rent until the property is vacant and you’ve scheduled a time to get the keys. Even with legitimate listings, waiting to exchange rent for keys cuts down on the hassle if your rental agreement falls through for some reason.
Ask for a second opinion. If something seems off about a listing, ask a neutral third party for their take. There are few processes more prone to emotional attachment than finding a home. The more you like a rental, the easier it is to let things slide and overlook red flags. Talk to someone who is familiar with renting—perhaps a friend who moves every few years for work, or your aunt who owns a rental home. If they, too, feel that something weird is going on, trust your gut.
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