Is Your Next Rental Really a Scam?
This question didn’t occur to an Idaho resident after finally finding the “perfect” home for his upcoming relocation to Rhode Island [*]. After speaking with the owner and touring the unit virtually, he wired the full year’s rent upfront — a total of $20,000.
But when he arrived, he was met by the true owner of the property, who had never posted an ad. The property was not for rent — it was all a scam.
Unfortunately, this situation is becoming more common. In 2021 alone, the FBI’s Internet Crime Complaint Center received 11,578 reports of rental scams — a shocking 64% increase over the previous year [*].
With high demand for rental units, scammers are taking advantage of people desperately searching for affordable places to live. So, how can you avoid rental scams when looking for your next home?
How Do Rental Scams Work?
Fraudsters set up rental scams by creating illegitimate listings for homes or apartments, and then tricking prospective buyers into making payments before realizing it’s all fake.
There are two main ways that con artists snag unsuspecting buyers into a phony deal:
- Phantom rentals occur when scammers create rental ads with photos of an apartment or home that they don’t own and that isn’t for rent.
- Ad hijacking occurs when fraudsters modify actual real estate listings and replace the realtor’s contact information with their own.
In both situations, the scammers hope that potential renters will agree to send money or provide sensitive information for a fraudulent rental agreement before seeing the property in person.
Here’s how a typical rental scam plays out:
- Scammers post (or hijack) an ad for an apartment or home rental, usually at a tempting below-market price point.
- Then, they communicate with potential tenants over the phone or online. They’ll create a sense of urgency to try and rush the process, while also making excuses as to why you can’t view the property in person. Instead, they’ll offer a “virtual tour” of a property to which they have remote access.
- Next, scammers convince victims to send money for a security deposit, background check, application fee, or first month’s rent.
- Once they get paid, the scammers disappear — leaving their victims without a home.
There’s no question that rental scammers are financially motivated, but they can also collect a significant amount of a victim’s personal information in the process.
The information on a typical rental application form — such as your full name, phone number, Social Security number (SSN), bank account information, etc. — is more than enough for someone to steal your identity.
The bottom line: Never send money or sensitive information to someone you’ve only met online.
How To Spot a Scam Rental Listing: 12 Warning Signs
Although fraudulent rental listings can surface anywhere, most of these scams are found on online marketplaces such as Craigslist, Zillow, and Facebook Marketplace.
Here are the clearest signals that point to a rental listing scam:
- A deal that’s too good to be true. Beware of listings that are below the going market rate for the area, or are unusually inexpensive for the unit size and amenities. Scammers use deals like this to lure in inexperienced or desperate renters.
- Spelling or grammatical errors or low-quality photos. Oversights like this can suggest that the listing is unprofessional and should not be taken seriously.
- Photos with MLS (Multiple Listing Service) watermarks. This could indicate that someone created a fake listing using stolen photos from rentals that are currently on the market.
- No exact address appears on an online listing. This prevents you from looking up the rental property online, checking it out in person, or otherwise verifying the legitimacy of the listing.
- An email response from someone other than the person listed as the owner in the ad. This should immediately raise your suspicions. Be especially cautious if you get a response from a management company for a listing from an individual (or vice versa).
- You’re asked to pay a deposit or the first month’s rent before seeing the unit. There’s no legitimate reason why the owner or agent shouldn’t be able to give you an in-person walk-through of the rental before asking you to make a payment.
- The owner claims to be out of the country and offers to ship the keys to you. This scam strategy establishes a delay between the renter’s first payment and the discovery that the keys were never sent.
- The property owner asks you to pay via wire transfer, payment apps, or other suspicious methods. This is a classic sign of a scam. Be cautious of any payment method that can’t easily be reversed or disputed (including apps such as Cash App, Zelle, and Venmo).
- You’re asked to pay a fee to see the home (or aren’t shown the home at all). There should be no charge to view the property. Any hesitancy to show it off is an immediate red flag.
- There’s no screening process before you “get” the apartment. Always look for signs of a thorough and professional review process from the real estate agent or property owner.
- The property manager pressures you with pushy sales tactics. Any attempt to rush the process is the con artist’s way of getting you to miss important details that add up to a scam.
- The application asks for sensitive information during the process. Your SSN and credit card number, for example, should not be required by the property owner before you have the chance to view the rental.
The 6 Latest Rental Scams (and How To Avoid Them)
- Fake rental listings on Craigslist and Facebook Marketplace
- Incomplete leases
- Landlords who are out of the country (or have a sob story)
- Long rental applications asking for sensitive information
- Requests for deposits via payment apps or wire transfers
- Fake “rental agents” claiming to represent private properties
Most rental scams follow the same general pattern. It’s all about getting you to pay first and ask questions later.
Here are the most common scams and how you can identify them before losing your money:
1. Fake rental listings on Craigslist and Facebook Marketplace
Scammers often take to online marketplaces that don’t provide extra security or verification features.
Large marketplaces that don’t specialize in rental listings may also draw potential tenants who are looking for low prices. They’ll be less likely to question listings with excessively low rent.
Warning signs of a fake rental listing:
- At best, poor spelling and grammatical mistakes are signs of an unprofessional ad. At worst, they could be signs of a scammer looking for quick cash.
- Lack of detail about the property and its address. If the landlord won’t supply the exact address of the rental property, it could be a scam.
- Poor-quality photos (or photos with MLS watermarks). Low-quality images could be stolen from other listings to trick you into thinking you’re getting a great deal.
- Be skeptical of listings charging extremely low rent. Scammers post tempting rent prices as bait to make it hard for potential renters to resist. (It also adds urgency to requests that you follow through quickly on any transactions.)
Don’t get scammed! Do this instead:
If anything in the ad looks off, trust your instincts and move on to the next one. It’s not worth being caught up in a scam.
2. Incomplete leases
Sometimes, scammers create leases that are vague enough for them to get away with fraud. An incomplete lease can allow the owner to change important aspects of the agreement after it’s already been signed, putting the renter at significant risk of unexpected charges.
Warning signs of incomplete leases:
- Vague wording may seem like a harmless oversight. But in the case of a leasing agreement, it leaves important stipulations up for interpretation so that the landlord can manipulate the conditions of the lease after the fact.
- Lack of specifics (such as exact address and rental amount, and terms of liability for damages and repairs) is always a dead giveaway.
- Another variation of this scam occurs when the supposed owner requests rent payment or a security deposit before the lease is signed at all. This is never a legitimate request.
Don’t get scammed! Do this instead:
If your potential landlord gives you a lease to sign, read it carefully and search for suspicious clauses or conditions. Request changes to the agreement immediately if you notice any areas that lack sufficient detail or specificity.
3. Landlords who are out of the country or have a sob story
Scammers hide behind seemingly plausible excuses to avoid suspicion from prospective renters. It’s just another way of getting away with important aspects of their scam, such as collecting rent without giving the renter an in-person tour of the unit.
Warning signs of sob story scams:
- The owner explains that they’re unable to give a tour of the rental space because they’re out of the country. You’re faced with the choice of signing a lease based on the photos from the ad, or passing up the offer altogether.
- Any other excuse or sob story from supposed owners is invented so that they can get out of meeting you (or showing the property) in person.
Don’t get scammed! Do this instead:
There are very few situations in which you should send money to a landlord without seeing a property in person. Even virtual tours can be faked if a scammer gains access to a property that they don’t actually own.
4. Long rental applications asking for sensitive information
Some rental scams seek to kill two birds with one stone by financially defrauding you and stealing your personal information in order to commit identity theft.
Warning signs of application scams:
- Supposed landlords send a rental application that must be filled out before meeting up or viewing the rental in person.
- The document requires the applicant’s date of birth, home address, credit card number, driver’s license number, Social Security number, and other sensitive information.
- While it may be requested under the guise of a landlord doing their due diligence, it’s actually a probe for more personal information than needed before you’ve even seen the property.
Don’t get scammed! Do this:
Avoid filling out any sensitive details about yourself until you’ve seen the rental space and met the owner.
5. Requests for deposits via payment apps or wire transfers
Scammers almost always ask for payments through methods that aren’t easily reversed or disputed. This includes wire transfers and cash, as well as apps like Zelle or Venmo. Any legitimate landlord will be able to receive deposits through traditional channels.
- The landlord requests payment using a non-traditional payment method such as a wire transfer, cash payment, or cashier’s check. These payments make it much more difficult (if not impossible) to cancel the transaction or claim it was fraudulent.
- The landlord makes excuses as to why you must pay by using a payment app (such as Zelle or PayPal).
- Other suspicious payment requests include paying with gift cards or cryptocurrency.
Don’t get scammed! Do this:
Don’t accept non-standard payment methods. Debit or credit card transactions are much more secure, and they include protections that can shield you from fraud and theft (which is exactly why scammers shy away from them).
6. Fake “rental agents” claiming to represent private properties
One type of rental scam that’s surged over the past few years is carried out on social media. Scammers set up phony profiles, often on Facebook, and contact other users who are on the lookout for places to rent [*].
Warning signs of fake rental agents:
- You receive an unsolicited message from someone on social media who claims to be a rental agent. They offer you an appealing rental unit for a low price.
- You find a listing that seems too good to be true — often an upscale rental for a below-market price.
Don’t get scammed! Do this:
If possible, avoid looking for housing and rentals on social media. But if you do take a chance on a Facebook Marketplace listing, do your due diligence and make sure the person behind the account is trustworthy and legitimate.
How To Avoid Rental Scams
- Research the landlord or listing agent’s name and company, and look up the agency on the Better Business Bureau’s (BBB) website.
- Make sure the apartment isn’t listed for rent in more than one area.
- Search for the address on Google Maps, and check street view images.
- Do a reverse image search of the photos in the ad. This can show you if scammers have stolen the images from a legitimate listing.
- Always visit and tour the unit in the listing (and never pay for a tour).
- Meet up with the landlord in person.
- Never pay a deposit or first month’s rent before seeing the apartment.
- Never make a payment before signing a lease agreement.
- Check leases and agreements before signing. Make sure that everything is clear and that there’s no critical information missing.
- Don’t make rental payments or deposits through wire transfers, payment apps, or other non-disputable methods.
Were You the Victim of a Rental Scam? Do This!
If you got tricked by a rental scam, there’s no shame in it. Scams are getting more sophisticated and more difficult to detect — especially when it comes to the social engineering scams that surface online.
Victims of scams often don’t report the incident out of embarrassment. But reports bring more attention to the problem and help spread awareness to other people who could be potential targets.
Here are some immediate actions you can take to try to minimize the damage of a rental scam:
- Freeze your credit. This can help block anyone from fraudulently opening up a line of credit in your name. You can also lock your Experian credit file with a single tap by using Aura’s easy-to-use suite of intelligent, proactive digital safety tools.
- Try to reverse any payments that you made to the scammer. Contact the app or financial institution’s fraud department and tell them what happened.
- Record all communications that you had with the scammer. This includes the original rental listing, all emails or texts, and any account information that you used (yours and the recipient’s) to send money.
- File a report with the Federal Trade Commission (FTC) and local authorities. File an official report at IdentityTheft.gov. This is an essential step if you need to dispute fraudulent charges or are the victim of identity theft. Contact your local law enforcement if you have any information that could lead to an arrest.
- Report the scam listing to the FTC, the FBI’s Internet Crime Complaint Center (IC3), and the platform on which you found the listing.
- Monitor your credit closely for signs of fraud or identity theft. Aura can monitor your bank, credit, and investment accounts 24/7 and alert you in near real-time about any suspicious activity.
- Consider signing up for identity theft protection services. Every Aura plan comes with $1,000,000 in insurance coverage for eligible losses due to identity theft. Try Aura free for 14 days →
The Bottom Line: Don’t Turn Finding a Home Into a Heartache
When you find a listing for an affordable home that meets your general preferences, resist the urge to jump on it too quickly.
A little caution goes a long way when it comes to internet security. But to shield yourself from scams that you never could have seen coming, identity theft protection and credit monitoring services go the extra mile to keep you and your family safe.