It’s that time of year again. People all over the country are packing up their belongings and parents all over the country are packing up their kids and taking them back to college. Having your own apartment is a wonderful rite of passage for a young adult. But with foreclosures still impacting the vast majority of the country, and with crime alive and well, there are scammers out there looking to separate you from your hard-earned money.
Here are some common rental scams:
The old tenant:
As one tenant plans to move out of a rental, they take pictures of the unit, and post them online advertising “for rent.” The tenant then shows the unit, offers a rental contract, and collects first and last month’s rent, along with a damage deposit. The tenant moves out off to places unknown, and the “new renters” show up, only to find they don’t have a legally binding contract with the actual owners, who no doubt have made arrangements to rent to someone else.
The crafty internet cruiser:
The criminal scans the internet, finding places for rent. A particularly industrious criminal will go to the house, and look under the mat, inside the mailbox, in the window box, or any other obvious place a key would be hidden. (You would be amazed how many people hide a key in an unsecure location.) This provides them with access to the home for “showings.” Less industrious criminals will just break the lock box, or break into the home and change the locks. In any event, the criminal now takes the pictures and description of the house, post them in a new posting with their email address, and make contact with would be renters.
The story ends the same, the criminal takes first and last month’s rent, a damage deposit, and disappears. There have been cases where renters have lived for days, sometimes even weeks before discovering the scam.
The ‘out of town’ owner:
Similar to the internet cruiser, the ‘out of town’ owner needs only the internet, and a gullible would be renter to offer pictures on the web of the place to be ‘rented.’ He may even lift legitimate pictures from a legitimate rental off one rental website and repost on another with his contact info. By offering less than market value rent, and creating a sense of urgency, the ‘out of town’ owner will seek to procure rent and damage deposits (and pet fees, etc., etc.) before actually showing the home.
The beauty of this scheme, to the criminal, is that it can be done over and over again, without ever showing their identity. This type of scam can involve mailing keys that don’t actually work on the property.
The foreclosure opportunist #1:
The foreclosure opportunist takes advantage of the fact that there are many homes currently abandoned, perhaps waiting for foreclosure, perhaps in bank custody. Like the internet cruiser, it takes little effort for the foreclosure opportunist to break into an empty house, install new locks, and begin showing the property.
In this particular scam, as well as the ‘out of town’ owner, they can rent it out, have rent sent to a PO Box out of town, and collect rent for months before the bank discovers the home is occupied.
The foreclosure opportunist #2:
One who’s house falls into foreclosure may also take advantage of renting opportunities. According to the Consumer Financial Protection Bureau, foreclosure proceedings cannot begin until 120 days of missed payments. After that, how long it takes to foreclose upon a property is dependent on the laws of the state the property is located in. Which means they have plenty of time after they stop paying the mortgage to rent it out their property and pocket the rent.
Contrary to the other examples, this is not necessarily illegal. However, if you drive your child half way around the country and install them in a lovely two bedroom rental, you do not want to have to deal with foreclosure proceedings, which will surely result in your child being evicted, 3 months later.
Student or Parents: How do you protect yourself?
The best way to protect yourself is to certify that the owner of the property is real. You can do this by using public records websites like checkthem.com. Here are some examples:
Confirm the first and last name of the owner matches the first and last name of the person you are dealing with. Confirm the house is not in foreclosure. Verify the owners do not have a bankruptcy pending. Verify the owner does not have a series of fraud or theft convictions. Do a reverse phone number look up to confirm the phone number also belongs to the person you are dealing with.
Other common sense advice:
You should always protect yourself by using common sense. Most people are taken advantage of because they don’t suspect anything. You should always have paperwork proving payments, inspect the property, and verify the owners. Here are some additional pieces of advice that will help you:
Never, ever, EVER wire funds. Wired funds are the functional equivalent of cash. Once you send it, it’s gone. Recalling or retracting a wire is nearly impossible, and police are overwhelmed with other problems that they rarely follow up. Never pay cash. Always have paperwork to prove that you made payments. Check the price of other rental properties in the neighborhood. If the price sounds too good to be true, it’s likely too good to be true. Scammers try to lure innocent people into rental scams by offering too good to be true price points. If there’s a lock box present but broken, take that as a bad sign. Lock boxes can be broken into by scammers who will show a property that does not belong to them. If there’s a “For Sale” sign in the yard, but you are viewing it as a rental, that may also be a bad sign. Be sure to follow all the steps in the previous paragraph. Check to see if the utilities to the house have been shut off. If the property is behind on payments for utilities, you should be extra cautious about the rental. If you see a neighbor out front, take the time to speak with them. Neighbors are a valuable source of information. If a home has been empty for a long time the neighbors will know. Confirm the home is well maintained – the condition of the lawn is a good clue. If the garage is detached, ask to enter it as well as the house. Open a faucet to confirm running water.
Remember! Common sense always prevails. Make sure to do your due diligence before renting. In the internet age, there are millions of scammers ready to snatch your dollar.