Rental scams have been around for decades. And, as the number of people looking to rent increases nationwide, more tenants than ever are on the lookout for these scams, so they don’t fall victim them.
Criminals that are responsible for these scams are aware of the heightened demand for rentals, and the increasing rent rates that property owners can demand, and they want in on whatever they can get.
However, when all is said and done, rental scams affect not only tenants, but property owners as well.
Though rental scams are not something many Chevy Chase property owners probably think about, they should definitely be on your radar. Learning about the different types of rental scams out there may help you prevent getting mixed up in a rental scam of your own.
What is a Rental Scam?
In short, a rental scam is a situation where a scammer attempts to secure funds from an interested tenant for a rental property that is not legally their own to rent.
The rental property in question may be physically real and just not theirs, or completely made up and non-existent.
Typically, a scammer will advertise a rental as available, hook a potential tenant by collecting application fees and security deposits, and at the time of move-in, simply disappear with money in hand.
By the time the prospective tenant realizes what has happened, the scammer is long gone and untraceable.
However, rental scams have evolved over time, and have become more complex than simply swindling prospective tenants out of their money.
Rental Scams That Can Involve Your Chevy Chase Rental Property
Here is the breakdown of three of the most common rental scams that happen today. Most people are generally very trusting, thus making these seemingly obvious scams extremely effective.
Keep reading to learn about the various ways a scammer may try to take advantage of you, the property owner.
1. Online Advertisements
Advertising your vacant rental online is one of the best ways to expose your vacancy to a wide tenant pool. Plus, it doesn’t take a great deal of effort or money to advertise online.
However, online advertisements are one of the easiest ways for people to scam your Chevy Chase rental property. All someone has to do is cut and paste your real online ad, and then lower the asking rent price.
This generates a lot of interest amongst interested tenants, especially those in a hurry to pay whatever fees are required to move in right away.
The scammer then gathers several application fees, security deposits, and whatever other fees he can get from multiple potential tenants, and runs away with all of that cash before anyone is the wiser.
This will affect you because if people find out your property has been involved in a shady scam such as this, the real advertisement displaying your property as available will not go over well with interested tenants.
This can ultimately ruin your reputation as a good property owner, and take your rental property business down.
2. The Fake Landlord
If, by chance, a scammer can access your vacant property, you are in a lot of trouble. The way this particular scam works is a fraudulent landlord pretends to be working on behalf of you, the real landlord, and sets out to get your property leased.
If you have not done your due diligence in routinely inspecting, securing, or making it seem as though your vacant property is occupied, the scammer might even show the property as though they are the actual landlord.
From there, a prospective tenant then decides they like your place, pays the required security deposits, first and last month’s rents, and application fees.
Then, one of two things happens:
- The scammer takes off with all of the collected funds, and the tenant never hears from him again.
- The tenant actually moves in to your property, and the scammer collects rent from them for as long as possible before being discovered. The scammer then disappears into thin air, leaving you with a property that has tenants living in it illegally, unbeknownst to you this entire time.
This creates a mess of legal problems that is going to cost everyone, save for the scammer, a lot of time and money.
3. Accepting Overpayments
As a Chevy Chase rental property owner, you should know that accepting overpayments for fees or rent from an approved tenant is never a good idea.
Typically, when this scam happens, your “tenant” overpays, and asks you to forward the extra money to a close friend or family member. They will have some well thought-out excuse as to why they cannot do it themselves, and oftentimes can be very convincing.
Unfortunately, what happens in this scam is that you send the extra payment to someone else, and then find out the check you received was actually bogus.
But by now, it’s too late for you to recover the funds you already sent out to your tenant’s sick grandma. You are now on the hook for that missing money.
Although this usually will not happen with tenants that you have already leased your rental to, the truth is, this happens a lot when it comes to security deposits at the beginning of a lease term.
And, it is not uncommon to see this happen with tenants that are out of town looking to lease your rental.
One surefire way to help avoid these types of issues with current tenants is to accept rent payments via a secure online portal. This way, when you receive rent payments, regardless of whether it is an overpayment or not, you will know the funds are legitimate once they hit your bank account.
Landlords Tips for Avoiding Rental Scams
Though most rental scams are aimed at getting money from tenants looking to rent a home, it is important, as a Chevy Chase property owner, to protect your investment property in any way you can.
- Always perform routine inspections of your rental, especially when it is vacant
- Make sure to change the locks in between tenants, so previous tenants don’t have access to your property after they have moved out
- Thoroughly screen all tenants before placement into your rental – income verification, clean backgrounds, and reliable rental history are all important
- Check popular online advertisement listings regularly to make sure your rental is not fraudulently being listed as available
- Avoid dealing with prospective tenants who contact you from outside of the country, or at least be careful if you choose to
- Never rush a tenant placement – this is when scams are most likely to occur
Lastly, one of the best things you can do to protect yourself from being scammed, or having a rental property mixed up in a scam outside of your knowledge, is to enlist the help of a Chevy Chase property management company such as Bay Management Group.
At Bay Management Group, we pride ourselves in taking every precaution to protect our rental property owners and their investment properties.
This means we do things like perform strict tenant screening, airtight lease drafting, routine inspections, and online rent collection. In addition, we help our clients keep their properties secure using a variety of security measures.
If you own rental property in the Chevy Chase region, contact Bay Management Group today and see how we can help you avoid getting caught up in a rental property scam.