Any time a market becomes hyper-competitive, scammers gain a huge advantage. When items are scarce, buyers feel pressure to make quick decisions and jump through whatever hoops sellers set. Scammers know this — think concert tickets — and jump into the chaos.
All this makes apartment hunters an easy mark. So easy that an estimated 5 million movers have fallen prey to some kind of scam, according to a new survey by ApartmentList.com. And nearly half of all shoppers have encountered a rental scam.
It’s a ritual of apartment hunting: You find a listing that looks great, only to have the “landlord” come up with a stream of excuses that all add up to requiring a non-refundable deposit on the place. In reality, the apartment doesn’t exist and the would-be renter loses their money.
In general, scams like these usually fail, as most consumers grow wary when the excuses grow long. But in the great apartment chase, renters often have to make large leaps of faith — or lose out on a potential new home. They’re renting long-distance and sight-unseen, or have trouble scheduling walk-throughs, or simply are required to pay two months rent up front. Plus, as prices rise and supply runs short, many renters get desperate.
So it makes sense that criminals have the upper hand in the hunt. And ApartmentList.com says 6.4 percent of all U.S. renters, or about 5 million people, have lost money to an apartment scam.
The ripoffs can be devastating. While the average loss is $400, ApartmentList.com said, one-third of victims say they lost more than $1,000, and 17.6% lost more than $2,000. And remember, victims are usually already struggling to pull together first-and-last, security deposit, and so on.
Here are the most common scams, ApartmentList.com says:
- Bait-and-Switch: A different property is advertised than the available rental, and the scammer tries to collect a deposit or get a lease signed for this property.
- Phantom Rentals: A scam artist makes up listings for places that don’t exist or aren’t rentals and tries to lure renters with low prices.
- Hijacked Ads: A fake landlord posts advertisements for a real property with altered contact information. Homes for sale are often re-listed as rentals in this type of fraud.
- Missing Amenities: A real rental is listed as having features and amenities it lacks in order to collect a higher rent, the rental market equivalent of catfishing in online dating, when someone fakes their identity. The leasing agent tries to get renters to sign the lease before they notice the missing amenities.
- Already Leased: A real or fake landlord attempts to collect application fees or security deposits for a rental that is already leased.
Victims usually learn quickly.
“In order to avoid a second experience with fraud, 36.7 percent of the renters surveyed conduct additional research to ensure legitimacy of a property,” ApartmentList.com said. “An estimated 35 percent are no longer willing to rent sight unseen, and 26.7 percent won’t sign a lease or pay a deposit before meeting the landlord in person. After losing money from rental fraud, some renters even change where they search for rentals or the types of buildings they are seeking.”
The best tip of all: Slow down. I know it’s natural to get frustrated and caught up in panic buying while looking for a place to live. But criminals are incredibly clever and becoming more sophisticated all the time. It’s OK to miss out on an apartment to make sure you don’t lose thousands of dollars to a scam. Don’t skip the necessary walk throughs. Ask for phone numbers and call the landlord to make sure the number is legitimate. Google the phone number, and the landlord’s name, to see if there are any complaints. And if possible, ask to speak to the outgoing tenant.
If you’ve read this far, perhaps you’d like to support what I do. That’s easy. Buy something from my NEW LIBRARY AND E-COMMERCE PAGE, click on an advertisement, or just share the story.