iROOMit® - How to Avoid a Flatmate Rental Scam
Types of Scams
1. The Rental Scam: Copied Listings
Have you ever been on a rental site and seen a listing that sounds perfect, maybe even too perfect to be true? Well, it probably is. Behind that posting, there’s likely a scammer waiting to take advantage of your excitement. Scam artists often copy listing details from an actual listing and create their own posting for the flat. They might take the details from this dream flat and lower the listing price by hundreds, or even thousands, of dollars to make it seem like it’s available at an unbeatable price. They will often take the listing and alter the contact information. Red flag: The scammer will tell you that they’ve had a high volume of interest in the unit and that, in order to reserve it, you need to pay a deposit immediately to claim it before someone else does. They might also refuse to virtually tour you through the unit without payment first. Be careful if they say they are out of town. This is normally a sign of a scam.
How to avoid this rental scam: The best way to avoid this scam is to ensure you’ve seen the flat— through a virtual tour—and refuse to pay any money before doing so. Common excuses for not being able to show the flat include the landlord saying they’re out of town, living overseas temporarily, or dealing with a family emergency. Although these may sound believable at first, it’s always best to avoid situations where you’re asked to pay money without meeting the landlord or at least having them show you the flat first.
2. The Rental Scam: Expensive Background Checks
It’s typical (and quite common) for landlords to perform background checks on all tenants before move-in. Landlords need to be sure that the people they’re signing an agreement with are exactly who they say they are. Often, the rental application fee will include the price of the background check. Some scammers, though, will ask for an exorbitant amount of money, saying that’s how much they need from you in order to cover the cost of a background check.
Red flag: If a landlord, or scam artist, asks for more than $30-$60 to pay for your background check, beware! This is a rental scam. How to avoid this rental scam: It’s important to never hand over cash on the spot for the background check. Work with a reliable real estate agent or broker so that you have someone to consult if something doesn’t feel right during the application process.
3. The Rental Scam: No Lease
Some scam artists will ask you to rent an flat or unit without signing any documentation. Don’t do it! Verbal agreements are uncommon and should cause suspicion. Month-to-month leases are common, but they usually include some form of agreement to sign beforehand. An agreement without a lease has the potential to be a rental fraud.
Due to COVID-19, this rental scam risks becoming more common, as many renters are moving toward virtually touring an flat, remote lease signing, and limiting interactions with landlords and property managers.
Red flag: When you ask for the rental agreement, the landlord will make an excuse as to why they can’t or don’t want to use one, in which case you’ll know it is a scam.
How to avoid this rental scam: Do not rent without seeing a lease or rental agreement first. Be upfront and ask to see a lease; you’ll thank yourself later. If a landlord does produce a lease, make sure to read it carefully and ask questions before making any decisions.
4. The Rental Scam: Missing Amenities
This type of rental scam is extra sneaky. The listing will advertise a building or unit as having luxury amenities to drive up the price of rent. When the renter has signed the lease agreement and moved into their unit, they soon discover that the amenities offered are nowhere to be seen.
Red flag: The lease will not mention the use any of the amenities offered. The listing will not include photos of the amenities like a fitness center, pool, laundry room etc. If the listing does have photos of amenities, they will be copied from other listings.
How to avoid this rental scam: Touring the building and unit in person is always the best way to ensure you are getting the correct information. If you are unable to tour in person, request a virtual tour through live video and take note of the unit door number to make sure it’s the correct unit for rent. Another option is to do a reverse image search on Google to make sure that the photos listed are not copied from another source.
5. The Rental Scam: Bait-and-Switch Listings
Bait-and-switch listings are rental scams that draw in renters for a certain unit, and then switch the property information on the lease to trap renters into a unit they did not intend to rent. These types of rental scams pray on renters who don’t read the details. Much like the terms and conditions section of apps, many renters will rush through the lease signing process and miss one very important detail- the address of the property they are signing a contract for.
Red flag: You are rushed through the signing process or encouraged to sign as soon as you receive the documentation.
How to avoid this rental scam: Read through your lease in detail, even the fine print. Check to make sure the address is correct and most importantly that the unit number is correct. Do not sign anything without reading through the details fully.
Pro Tips for Renting Safely
To ensure the other person's identity, make sure they are ID Verified and upgraded to VIP.
For protection and to avoid any confusion, disputes or scams, we highly recommend using our partnership with Stripe to pay your rent through your Account Dashboard, where Stripe has verified the receiver's ID. Your rental transfer will then be protected by Stripe.
If possible, try speaking with the current tenants. If someone lives in the unit now, they are usually the best source of information about the flat and landlord. You can ask about the cost of utilities, rent increases, and anything else that the landlord might be less inclined to tell you. It may be worth asking about the security deposit set-up and the terms of the lease (if the current tenants are comfortable talking about it) so you know what you may be getting into.
Never wire money or provide sensitive, personal information (like your social security number or bank account routing numbers), to someone who has posted an unverified listing. Never give cash or send money through Venmo or PayPal without verifying the listing and touring the potential listing first. Also, never pay a security deposit without first signing a lease.
Pay attention to the listing details. If you see an ad stay up on a listing for well over a month it could be a way to draw in applicants to collect application fees.
Inspect the listing photos. Make sure there are no watermarks or copyright information on the photos. If there is, make sure it belongs to a credible source.
Verify the address. If the listing does not have an address, ask the landlord or property manager for the address and then put the address into Google Maps and verify that it’s the same building as shown in the photos.
Trust your instincts. It’s better to be safe than sorry when it comes to your money. Contact an expert to take the appropriate steps if you think you’re being scammed.