How to know if a rental listing is a scam, fraud experts say

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.

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.

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 in many ways,” Breyault said. “Particularly if there is suddenly an increase in the number of people who are in need of housing.”

1. Unsolicited messages about a rental

Personal information like cell phone numbers and emails are readily available on the dark web given the amount of data breaches in recent years, said Tracy Kitten Goldberg, director of fraud and cybersecurity at Javelin Strategy and Research.

If you receive an unsolicited message about an apartment that is available for rent, for example, “that would be a red flag,” she said.

“Especially if you have not contacted anyone,” whether you get a text or an cold call, she added.

Experts say if you’re contacted via text message or a phone call for a rental listing, look at the phone number’s area code. If it’s outside your area, be careful.

If you get an email, take a look at the sender’s address. Does the address contain multiple characters like a mix of letters, numbers and varied punctuation marks or symbols? Or is it coming from a personal account like a Gmail or Yahoo, but poses as a company email? If the answer to either is “yes,” delete it right away, Kitten Goldberg said.

2. Unusual forms of payment required

If the so-called landlord or listing agent requests you to pay an application fee or the first month’s rent through a wire transfer, a gift card or through cryptocurrency, that is “a huge red flag,” Breyault said.

Also be wary if they request a payment through payment apps like Apple Pay, CashApp, PayPal and Zelle, per the Federal Trade Commission.

“What all of those payment methods have in common is that the money goes from you to the recipient nearly instantaneously,” Breyault said. The transactions are often irreversible, even if you determine that it was a fraudulent payment.

Federal laws regarding compensation under fraudulent losses often don’t apply to such transactions, he said. Therefore, if you’re met with these payment options from the so-called listing agent or landlord, stop the application process in its tracks.

3. Refusing to meet or show the property in person

“You should always meet these people face-to-face before you fill out any kind of paperwork,” Kitten Goldberg said, as well as tour the property.

If a landlord or listing agent makes up excuses about why they can’t meet you in person or why you can’t see the rental property in person, that alone should be a red flag, Breyault said.

If you’re out of town or moving to a new city and do not have the ability to vet the apartment yourself, request a virtual tour of the space, experts say. If possible, ask a friend or relative to visit the property for you. 

“That’s really the litmus test to find out if an apartment is for real or not,” Breyault said.

4. Unusually low asking price

If a rental listing is “priced unusually low” compared to similar properties in an area, be careful, Breyault said.

“The reason scammers put listings like that up is because they know that it will attract a lot of eyeballs and potential victims,” he said.

Make sure to compare the listing price to others in your city or area of interest, and be wary of offer that may be too good to be true, Breyault said.

“Do bargains exist? Absolutely, but so do a lot of scams,” Breyault said.