Technology has decreased marketing costs, helping landlords advertise their rental properties to a wide range of potential tenants near and far. While this is certainly rewarding, it has also led to the popularity of online rental scams. Landlords may think that it won’t hurt their business but it can eventually impact their profits, leaving them with a bad business reputation.
The loss of trust from victims of rental scams can result in longer property vacancies and more marketing and maintenance expenses. To avoid the effects of rental scams, it’s best to learn more about them so it’s easy to resolve the issue when faced with it. Here is how rental scams typically unravel:
Property Ads and Photos are Re-posted by a Scammer
Online scammers frequently re-post real listings online and use them to trick potential renters. If your property ad gets posted on another listing site and the scammer entertains questions from the potential tenant candidates this could hurt your reputation.
The scammer will act like the owner and engage with the interested renters, attracting them with low rental rates and fast approval.
The Scammer Asks for Money
Once scammers are able to hook a prospective renter, they will create a sense of urgency for the renter to make a payment deposit. They’ll likely label it as a reservation fee for an in-demand rental unit.
The Potential Tenant Discovers the Scam
After the renter submits the reservation fee, the communication with the scammer will end quickly making it difficult to track them down. However, the victim can still lay the blame on the landlord, thinking that the money was transferred to the landlord’s pocket. When this happens, rumors can spread that your rental business is unworthy.
If a landlord continues to not take the scam incident seriously, it can hurt their income and overall return on investment. You must, therefore, be decisive when you encounter this issue and protect your business reputation.
Tips To Avoid Rental Scams
You need to instruct potential tenants to be cautious even if they want to find a new place of residence fast. Doing research and verifications is recommended. They can also follow these ways to avoid becoming a victim of a rental scam:
- Book a property tour first to ensure that the unit matches the photos in the ads.
- Check to see if you’re communicating with the real landlord. Otherwise, you might end up giving money to someone who isn’t permitted to rent out the unit.
- Engage with current and past tenants in the rental, as a precautionary step.
- Avoid sending money online. It’s best to meet with the landlord in person to protect yourself from a sudden shutdown of communication after the money is received.
How to Spot Signs of a Rental Scam
Always remain alert to the signs of rental scams to avoid financial losses. If you notice the following situations, take action immediately:
The Rental Unit is Priced Below its Market Value
If the lease rate is far cheaper even when the rental unit looks above average, then it’s right to be suspicious. If the fee is too good to be true, then it probably is. Scammers entice prospective renters with amazing photos at attractive rental fees. You should check the rental unit in person to confirm.
The Absence of Credit Checks
Tenant screening is an important process landlords do to ensure that the candidate matches the criteria they set. If the rental agent does not require a background or credit score check and offers flexible requirements, you should exercise caution.
A Steep Reservation Fee is Required
Alarm bells should be ringing off if the “landlord” asks for a large sum of money outright as a downpayment or reservation fee. This is even more worrying if you’ve never seen the property or landlord in-person.
The “Landlord” is Pushing People to Sign a Lease Immediately
It’s reasonable for renters to ask for a property showing prior to affixing their signatures on the rental contract. If the rental owner or agent pressures them to sign the agreement without seeing the rental space, then this is a ground for suspicion.
How Landlords Can Protect Their Rental Property
It can be challenging for landlords to track scammers on their own, especially if they’re busy. You have to monitor various online platforms to ensure that your listings or likeliness are not being used without your knowledge.
It’s, therefore, advisable to engage with reliable property management companies who have long-term industry experience. Entrusting your real estate investment to professionals offers plenty of advantages.
For one, property management companies provide extensive and streamlined services from rent collection and property marketing to tenant screening and property maintenance and repair, including lease drafting.
They can also reduce the risks of being scammed since property management companies have the resources and strategies to track and limit these incidents. In the event of a scam taking place, diligent property management will report the issue to relevant authorities.
Bottom Line
Rental scams can lead to undue stress for both landlords and renters, so it’s vital to be aware of the red flags. If this is a time-consuming affair for you, it’s recommended to partner with an experienced property manager such as Prime Realty Property Management.
Under Prime Realty Property Management, your rental home is protected from scams, given the company resources and legal team. If rental property ads are seen in other listing sites, we request for the ad to be taken down immediately.
We prioritize maximizing your earnings and protecting your business reputation. Contact us today to learn more about the customized property solutions we provide and how we can help you gain rental success.
