It’s spacious, below-market price, and doesn’t require a background check—it’s the apartment of your dreams! But if it sounds too good to be true, it probably is. Here are some of the most common apartment rental scams, how they work, and how you can spot them before you sign a lease that turns your dream apartment into a waking nightmare.
Common Rental Scam #1: Fake Listings
Informal apartment search websites such as social media and Craigslist allow anyone to advertise properties with little to no oversight. Unsurprisingly, scammers take advantage of this and swindle renters out of their money.
This common apartment scam usually starts with the fraudster creating a fake listing or copying a legitimate one from a real estate website. Savvy scammers use property photos from real estate websites and craft masterful descriptions of “their” property’s perks and amenities to reel in prospective renters.
Once a prospective tenant requests more info, the scammer informs them that “there’s been a lot of interest,” and that they’ll need to pay a deposit to reserve the unit. Usually, this payment is to be made in cash or by wire transfer. Once the deposit is paid, the shady landlord and listing disappear, with the would-be renter’s money in their pockets. To avoid fake listing apartment scams, watch out for the following red flags:
Signs Your Dream Apartment Is a Fake Listing Scam
- The listing agent asks you for cash or a wire transfer
- The price is way below market price
- You find the same unit advertised multiple times under different prices and varying landlord profiles
Common Rental Scam #2: Bogus Background Checks
According to the FTC, landlords may require a background check (including your arrest record, credit history, and rental history) before renting you an apartment. Accordingly, don’t be alarmed if a landlord or leasing agent asks for your permission to run a background check or consumer report on you. However, be wary of landlords that ask you to pay for your own tenant background check.
Some scam artists go for large sums of money in the form of deposits. Others are more subtle — asking renters to pay smaller fees for things that would normally be free. Legitimate property management companies will usually cover the cost of screening tenants. If you’re renting directly from the landlord, they may ask you to pay for your background check, but even if they do, such screenings rarely cost over $75.
If you’re required to shell out over $75 for your apartment background check, someone might be trying to take advantage of you. Whether it’s a legitimate landlord who wants to profit off the rental application process or a scam artist who’s going to pocket the money, questioning unreasonable fees could help you save money.
Pro tip: Be especially careful about handing over your personal information. Some scammers are after your identity rather than your cash. After all, the potential gain from identity fraud is more substantial than that of petty theft. As reported by Quartz, the going rate on the black market per identity ranges from $1 to $450. Don’t fall for the increasingly common crime! Before giving out your info, verify the legitimacy of the property you’re considering and of the people who own or run it.
Signs of Bogus Apartment Fees
- The landlord or property manager asks you to pay more than $75 for your consumer history report
- The landlord or property manager doesn’t gather information required for a background check, such as your full name and date of birth
- You are not asked to sign a “Tenant Background Authorization Form,” which gives your property manager permission to check your criminal record and credit history
- You’re bombarded with numerous “upfront fees” as soon as you express interest in the rental unit
- The person requesting the payment is unwilling or unable to tell you which screening company is performing your background check
Common Rental Scam #3: Unofficial (or Nonexistent) Lease Agreement
A landlord that tries to collect rent before having you sign a rental agreement might be trying to take advantage of you. Long-term and month-to-month lease agreements exist to protect both the lessee and the lessor — so, if your potential landlord won’t provide such documentation or insists on a verbal agreement, he or she may have ulterior motives.
By not having a lease in place, property managers and owners minimize the obligations they owe to tenants. In such situations, you are considered a “tenant at will,” and your landlord’s only responsibilities to you are the lowest required in your state. In practice, this means that they need only give you minimum notice before raising your rent or requiring you to move out.
Moreover, an informal lease or verbal agreement may be a sign that the place you’re renting doesn’t meet the legal requirements for rental properties — which makes it more likely to be unsafe or unsuitable for residential use.
Weed out apartment rental scams and shady landlords by insisting on a written lease, even if it’s a month-to-month rental. Chances are, it’ll save you time, money, and a whole lot of trouble.
Signs You’re Being Scammed With an Unofficial Lease
- If the property manager or landlord insists on a verbal agreement, they may have plans to raise your rent or ask you to move out early on in your tenancy.
- If the landlord or property manager asks you to pay rent without a lease, they may be con artists that don’t really own or manage the unit in question.
- If there is no lease, the unit may not meet the legal standards for residential use.
Common Rental Scam #4: Bait and Switch
Bait and switch is a deceptive marketing practice that happens when a seller offers something at a ridiculously low price, with the intention of “switching” the offer for less desirable or more expensive goods. Bait and switch fraud often happens in retail, when a store lures customers in with a decoy offer that is either out-of-stock or invalid by the time they get in the door! However, this questionable business practice happens with apartment rentals too.
Unethical leasing agents or property brokers advertise apartments at deeply-discounted prices to get prospective renters to show interest. Once the hopeful renter shows up for a tour or asks for more info, the unit is no longer available. However, the agent encourages prospects to tour “similar” availabilities that are either more expensive or less desirable.
The FTC deems bait and switch scams illegal, but whether or not an ad is a scam depends on the advertiser’s intent. In the case of rental housing, if a landlord or broker posts an apartment at a low price with the intention to rent a more expensive or inferior unit in its place, it’s fraud. If the advertisement was legitimate and the unit got leased before you got to it, it’s plain old bad timing.
Signs You’re Being Set Up For a Bait and Switch Scam
- If the apartment is listed at a ridiculously low price in comparison to other units in the same property, the offer is probably renter “bait.”
- If the apartment or the rent seems too good to be true, it probably is!
- If you tour a model unit and are pressured into signing a lease for a “similar” apartment without seeing it first, the tour-giver might be trying to conceal the less desirable qualities of the apartment you’re renting.
Avoiding Apartment Rental Scams
Just like most landlords check your background before handing you the keys, you should do your own research before signing a lease. Avoid rental scams by touring the unit you’re renting and verifying the identity of your point-of-contact, whether that’s a landlord, leasing agent, or property manager. Last but not least, steer clear of unofficial apartment finding methods such as social media groups and online classified pages. Instead, turn to a reputable apartment finding website that rewards you for finding the place of your dreams!