By Frank Pulley & William Bronchick
There are a lot of scams and phishing schemes going on in this technological world today. Technology is great and helps in our everyday lives; both business and personal. The problem is that problems that didn’t exist a few years ago exist now as a result of all this technology. Among the many types of scam out there is the rental property scam. Rental scams have been around for a few years and although they affect would-be tenants more than landlords, they can still have a negative impact on landlords. Being in-the-know is key in this fast-moving world!
For example, did you know that if someone scams a tenant that moves into one of your rentals and that tenant pays rent to the scammer that the tenant might now be considered a squatter? If that happens, then normally a whole new set of rules apply, and it can be a tedious and expensive process for you.
In that vein, the purpose of this article is to educate landlords about some of the most common rental scams and how to prevent them. You can, in turn, educate possible tenants looking at your property that tell you that they like your rental but there is another one available like yours for half of the rent you’re asking.
These apply to both single-family homes and to multifamily units.
How scams work. Although there are a variety of ways this works, in general, a scammer tries to rent and collect money from a prospective tenant, for a property that they have no legal right to. In many cases, the scammer steals a picture from an existing ad and then posts it at a much cheaper price (the hook) on either the same website or often several different sites. In some cases, they may have somehow gained access to the property and can show it, but more often, they post great pictures of the inside that (which may or may not be actual inside photos) show how great the property is and ask you to do a drive-by. Then they claim they are out of town or out of the country and want to transact business by email, phone, text, etc. They will do everything to extract money from the tenant by cash, wire transfers, gift cards or other means.
Here are some signs that a scam is likely being perpetrated:
Here are some common ways as a landlord to prevent these scams.
Finally, what you should do if you think your property is getting scammed.
In this world of technology and the internet, there is always someone trying to remove as many of your hard-earned dollars as they can from you and others. Stay educated and keep current on what the latest scams and schemes are whether it’s personal or business.
President and founder of the Colorado Landlords Association, best-selling real estate author and attorney, landlord and real estate investor with 28 years' experience.