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It’s exciting to find a new place to rent in your neighborhood or in a new city. That is, of course, unless you get duped.
In so-called rental listing scams, scammers will make up listings that aren’t available for rent or simply do not exist in order to fraudulently take your money, according to the Federal Trade Commission. Scammers will often ask for payments like an application fee, a security deposit, the first month’s rent or a mix of such charges.
“Once the payment is sent, the [so-called] landlord or listing person … disappears,” said John Breyault, vice president of public policy, telecommunications and fraud at the National Consumers League, a consumer advocacy group.
Potential tenants lose cash to rental scams
It’s not uncommon for individuals to fall victim to fraudulent rental listings, experts say.
About 9,521 real estate fraud complaints were filed in 2023, resulting in more than $145 million in losses, according to the latest Internet Crime Report by the Federal Bureau of Investigation. Those figures are down from 11,727 victims and more than $396 million in losses in 2022.
The agency defined real estate fraud as a loss of funds from a real estate investment or fraud involving a rental or timeshare property.
While it’s convenient to look for a new rental online, experts urge future renters to be cautious, as you may lose hundreds to thousands of dollars if not careful.
For example: Let’s say you fall for a scam that asked for a security deposit — which is often the equivalent to a month’s rent — the first month’s rent upfront, or both. Nationwide, the median monthly rent was $1,373 in December, according to Apartment List.
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A separate report by Rently, a leasing automation platform, found that 62% of respondents who experienced a rental scam lost more than $500, with 48% losing more than $1,000. A smaller share, 8%, were duped out of more than $5,000, according to the report.
The survey polled 500 U.S. adults in November who have rented an apartment, condo or house over the past five years and have either experienced or are aware of rental scams and fraud.
If you need a new place to rent this year, here are some things to watch for to determine if a rental listing is a scam and what to do, according to experts.
4 red flags to watch out for
While it’s a common tactic for different kinds of scams, rental listing scammers will try and create a sense of urgency to get you to pay the money immediately, Breyault said.
To work around this issue, experts urge renters to carve out ample time for their search. Doing so can help reduce that sense of urgency.
Rental scams can also fester in housing markets with high competition and low supply, or after natural disasters take place.
“Fraud tends to follow the news and tends to follow natural disasters…
Read More: How to know if a rental listing is a scam, fraud experts say