Searching for an apartment, house or townhouse can already feel stressful. In many parts of the country, limited housing inventory and rising rental prices have made it even more challenging to find an affordable place to live. Unfortunately, scammers know that prospective renters are often under pressure to make quick decisions—and they take advantage of that urgency.
A convincing online listing, attractive photos and an unusually low rental price may seem like the perfect opportunity. But sometimes a deal that appears too good to be true really is.
Rental scams can happen in large cities, small towns and anywhere in between. Whether you're looking for a single room, an apartment or a house, it's important to know the warning signs before sending anyone your money or personal information.
One of the most damaging aspects of a rental scam is that, depending on the circumstances, your financial institution may not be responsible for reimbursing money that you voluntarily sent to a scammer. Once the payment has been made, the funds may be impossible to track or recover.
Fortunately, learning how some basic rental scams work—and knowing what warning signs to watch for—can help you better protect yourself.
Common rental scam tactics
The Federal Trade Commission (FTC), the federal agency that helps protect consumers from deceptive and unfair business practices, receives millions of consumer reports every year. Those reports help identify fraud trends, warn consumers and support investigations into scammers.
According to the FTC, rental scams commonly take several forms, such as these:
A legitimate listing is stolen. Scammers copy photographs and descriptions from legitimate rental listings, replace the real owner's or property manager's contact information with their own, and repost the listing on another website.
If someone responds to the advertisement, the scammer may collect an application fee, security deposit or first month's rent before disappearing.
A fake property is advertised. Some scammers create listings for fraudulent properties that either aren't available for rent—or don't exist at all. These listings often feature unusually low rent, luxury amenities or other enticing offers designed to attract attention. When asked to show the property, the "owner" may claim to be out of town, overseas or otherwise unavailable. Instead, they'll pressure prospective renters to send money immediately by wire transfer, gift card, cryptocurrency or a digital payment app before seeing the property. Once payment is made, the scammer disappears.
A property is shown using a stolen key. Some criminals take rental fraud even further by stealing keys from lockboxes attached to vacant properties. After making duplicate keys, they advertise the property, conduct showings, have renters sign fraudulent lease agreements and collect deposits or rent payments. Victims may not discover the deception until they attempt to move into a property that was never legally rented to them.
7 ways to help avoid a rental scam
While no method can eliminate every risk, these recommendations—many of them based on FTC information and resources—may help reduce your chances of becoming the victim of a rental scam:
1. Verify who is offering the property. Confirm that the person advertising the rental either owns the property or is legally authorized to rent it on the owner's behalf. Scammers frequently pretend to be landlords or property managers for properties they don't own.
2. Research the property and the rental company. Search online for both the property address and the company or individual's name. Include search terms such as:
- Review
- Complaint
- Scam
- Fraud
- Fake
Carefully read any reviews you find and determine whether they appear credible before moving forward.
3. Compare listings carefully. Search for the same property on several well-known rental websites. Be cautious if you notice:
- Different rental prices
- Different owners or property managers
- Different photographs
- Conflicting descriptions or amenities
These inconsistencies could indicate a rental scam. As another precaution, consider performing a reverse image search on the listing photos. If the same pictures appear under multiple addresses or owners, the listing may be fraudulent.
4. Visit the property whenever possible. Whenever practical, inspect the property in person before signing a lease or making any payments. If you cannot visit because you're relocating from another city or state, consider asking a trusted friend or family member who lives nearby to inspect the property, take photographs and confirm that it matches the online listing. Be especially cautious if someone refuses to show the property in person and insists on collecting payment after only a virtual tour.
5. Be careful how you pay. One of the biggest warning signs of a rental scam is the requested payment method. Be extremely cautious if someone asks you to pay using:
These payment methods are often difficult or impossible to trace and reverse after funds have been sent. Instead, consider using payment methods that create a clear record of the transaction, such as a cancellable paper check (either personal or cashier’s) delivered to the legitimate property manager or rental company, or a credit card, since they often have some form of built-in fraud protection.
6. Don't let anyone pressure you. Scammers often try to create a false sense of urgency. They may claim that several other people are interested in the property or insist that you must send money immediately to avoid losing it. A legitimate property owner or management company should generally allow you reasonable time to review the lease, ask questions and complete payment using an appropriate method.
7. Never pay before completing the rental process. Avoid paying a security deposit, application fee or first month's rent until you have:
- Verified the property
- Met the legitimate property owner or manager (when possible)
- Inspected the property
- Completed online research for reviews or ratings of the rental property or its management
- Reviewed and signed a lease agreement
Taking these extra steps may help protect both your money and your personal information.
If you encounter a rental scam, report it promptly
If you believe you've encountered a rental scam—or narrowly avoided becoming a victim—the FTC encourages you to report it as quickly as possible.
You can:
- Report the incident at ReportFraud.ftc.gov. After you submit your report, the information may become available to more than 3,000 federal, state and local law enforcement agencies throughout the United States.
- Follow the recovery guidance provided by the FTC after submitting your report.
- Contact your state's attorney general's office or consumer protection agency to determine whether additional reporting options are available.
- If you need legal information or assistance, investigate nonprofit legal resources available in your area. For example, Georgia residents may find useful information through GeorgiaLegalAid.org.
Information sources used for this post
Information used in preparing this article included resources from:
Learn more about protecting yourself from online and other types of scams
Delta Community's Financial Education Center offers free webinars and in-person workshops covering a variety of money management and fraud prevention topics.
Visit the Financial Education Center's Events & Seminars page to register for upcoming educational opportunities.
You can also explore additional Delta Community blog posts covering scams, identity theft, cybersecurity and practical financial guidance to help protect your accounts and better manage your finances.
