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Craigslist rental scams – and how to avoid them

Pete Gerardo
The Mortgage Reports contributor

In this article:

As you begin your online apartment search, be on the lookout for these common scams:

  • Cloned listings. Details are copied and pasted from a legitimate listing, then offered at a very low price. Remember, if the price seems too good to be true, it is.
  • Illegal sublets. A scammer has obtained access to an apartment and shows it to you as though it is theirs to rent out. To avoid this scam, verify who actually owns the unit or building.
  • Fake real estate databases. Some sites offer to provide a list of rental properties if you pay a fee. After purchasing the list, you’ll discover most of the listings are fake or expired, and you can’t get a refund. Worse, you may then be billed monthly for continuing to use the service. To avoid this scam, check if anyone has filed complaints with the Better Business Bureau, and research the names of the company and its owner before signing up.

Rental scams: Be careful out there

Once upon a time, people searched the local newspapers to find apartments. But thanks to the internet, Craigslist is now the “go-to” place for many rental seekers and rental scammers.

One recent survey estimates that 25 percent of Craigslist rental listings are actually frauds.

Although Craigslist removes suspicious ads ASAP, many rental scams stay posted for up to 20 hours. That’s more than enough time to lure some apartment-seekers to their doom.

To help you avoid these scams, we’ve examined the three most common cons in use today, as well as red flags and prevention tips for each.

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Rental scam #1 – the cloned listing

This is one of the most popular Craigslist rental scams, perhaps because it’s so cheap to execute.

The scammer copies and pastes information from a legitimate rental ad, and then offers a price that’s literally “too good to be true.”

If you respond to the fake ad, the scammer may invite you to drive by the property to view the exterior. What they will not do is give you a tour of the interior. That’s because they are “on vacation” or otherwise unavailable to show the place.

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If you decide to move forward, the con artist will ask you to wire the first month’s rent and a security deposit via Western Union, PayPal or even iTunes.

Once that happens, kiss your money goodbye.

Some victims don’t even realize they’ve been conned until they show up with a moving van and discover that someone else is already living in the unit.

Red flags

You don’t get a tour of the unit’s interior by the landlord, broker or building manager. The “owner” insists on payment in advance and wants the funds sent by wire transfer.

Also, the listing details may be vague or not match up with the neighborhood or building. (For example, the ad might mention a large swimming pool in a neighborhood with tiny lots.)

A dead giveaway is when listing photos have MLS watermarks. This indicates that whoever posted the ad doesn’t have the original photos and, therefore, probably doesn’t own the property.

Perform a reverse image scan of the photos by visiting TinEye. You can also right-click the images and select “Search Google for image” to see if the pictures have been used elsewhere.

Prevention Tips

Legitimate landlords will arrange a tour of the interior. And they will usually accept a personal check, cashier’s check or money order for the first month’s rent and security.

Never send advanced payment! Money shouldn’t change hands until a lease is signed.

Rental scam #2 –the illegal sublet

This is similar to the cloned listing scam, but even more insidious.

This scammer has access to the apartment, condo or single-family house. The rip-off artist has either rented the unit, broken into the place while the owners were away, or obtained access to a home that’s currently unoccupied.

You can meet face-to-face with this “landlord,” who will give you a tour and may even have a phony lease for you to sign. For these reasons, unmasking the fraud requires some sleuthing.

Red Flags

If you see signs of a break-in (busted locks, doors or windows), be very suspicious. Your “Spidey Sense” should also tingle if the alleged landlord or broker insists on payment via wire transfer.

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In addition, a fake landlord will be ready to do the deal without asking about your background – your occupation, income, etc.

(On the other hand, beware of people who ask for too much personal information. They may be trying to steal your identity.)

Prevention Tips

The only guaranteed way to uncover this scam is to verify who actually owns the unit or building. To ensure that the person renting the unit is the legitimate owner or property manager, do an online search of municipal records. Your county assessor’s site will likely allow you to search by address to find out who owns the building.

Rental scam #3 – the fake real estate database

Be wary of any “real estate agency” or other real estate firms that sell databases of rental units, rent-to-own properties or pre-foreclosure homes. Some of these services, which charge a sign-up fee or a monthly fee of up to $200, are scams.

After buying one of these databases, you might discover that most of the listings are fake or expired. Next, you may learn that it’s impossible to get a refund.

In some cases, you’ll start receiving bills every month that is impossible to stop – unless you call your credit card company to get a new card. There’s no way to unsubscribe to this “service.”

Red Flags

Scammers tend to offer these databases at very low prices.

Prevention Tips

The best prevention method is to research the names of the owner and the company before signing up for the service. Check to see if anyone has filed complaints with the Better Business Bureau. Or, simply enter the company’s name into a search engine next to the keyword “scam.”

Rent-to-own homes: Move in now, buy later

These aren’t the only rental scams out there, but they are usually the most costly.

Another old favorite is unethical, if not always illegal, “bait and switch” scheme. Here, an unscrupulous broker lures you with a great apartment listing and only later reveals that the place has a much higher rent. Or, the broker tells you that the “bargain apartment” was just rented. Then, they show you nothing but higher-priced models.

The bottom line: If you think scams are something that only happens to dummies, think again.

Con artists are continually upping their game. Even savvy renters can make mistakes, especially in competitive housing markets.

Verify your new rate (Nov 20th, 2018)