Tips For Avoiding Rental Scams
Rental scams have been with us since the beginning of the real estate business. Whether the thief makes away with the security deposit of a tenant or collects background-check fee from hundreds of potential tenants, rental scams are potentially harmful and should be avoided. The housing crisis which resulted in many unoccupied properties is not helping the situation, it gives more targets for the thieves. This article will only focus on tips for preventing security deposit scams, and hopefully it could apply to other forms of rental scams. While preventing a complicated scam can be very hard, the following tips will help you reduce the risks.
#1. Say No to Cash
Paying by cash is untraceable, and you should try to avoid landlords who insist on this payment system. Also avoid paying your security deposits or first month’s rent through Moneygram, Bitcoin or MoneyPak, these are equivalently hard to trace.
#2. Demand a Written Lease
While oral leases are allowed in some places, this is often problematic. As a tenant, you should always require the lease be written down stating your responsibilities and that of the landlord. Make sure it is signed and a copy is handed to you for reference purposes.
#3. Never Rent an Unseen Property
Renting a property without seeing it first results in bad rental situations. Although this may not prevent the scam, as many criminals could have access to a property, but it reduces the risks of fraud and gives you the opportunity to see the condition of the house.
#4. Meet the Landlord in Person
Insist on meeting the landlord in person. This will help you screen out some criminals and have an impression on the landlord’s personality. Also dealing with a local landlord as oppose to an out-of-town landlord will minimize the risk of fraud altogether.
#5. Speak with the Current Tenants
An occupied property is far less fraudulent than an unoccupied unit. Given the opportunity, talk to the current tenants in the absence of the landlord to find out how they are treated and if anything out of the ordinary takes place.
#6. Ensure the Written Lease Identifies the Owner or Agent
Make sure the owner or agent’s correct information is disclosed in the lease before you sign it. It would not hurt to google the address to see if it is not an address of an apartment or a P.O. box.
#7. Identify the Actual Owner
Do some research on who actually owns the house. One way to do this is by reviewing deeds. However, in some cases, you may not need to identify the actual owner of the house if you are certain that the person you are dealing with is a legitimate non-owner landlord or agent.
#8. Research
Never take a chance when buying a house. Google the landlord’s name, address and also the name of the management company to see if anything weird is going on. If you are really up for it, you can hire a skillful researcher who will be able to see if the property is in foreclosure. Properties in foreclosure indicate a badly managed property and a potential target for scammers.
#9. Be Aware of Market Rates
Being aware of market rates helps you to be suspicious of any property that is being offered at far below market rate. This could be a scammer trying to get the house off the market as quickly as possible.
#10. Be Aware of High-pressure Sales Tactics
Be careful with landlords who attempt to sell you the house without going through the normal routine of the deal, such as background checks. Scammers tend to cling on to easy targets and avoid anything that might delay the closing of the deal.
#11. Hire a Licensed Real Estate Agent
You are less likely to be scammed if you hire an agent to represent you. Usually an agent would be familiar with the security measures against frauds, and also you can hold the agent responsible if you are scammed.
#12. Avoid Sub-leasing
Never be a sub-tenant. This is risky, because finding the original tenant, if something goes wrong, is even more difficult than finding the actual landlord. Even if you could find the original tenant, high chances are he is broke or uninsured. The safe thing to do is to find the owner, terminate the old lease and sign a new lease.
