The Top 5 Tips to Avoid Rental Scams at Your Investment Property
Rental listing scams have been increasing. Because of that the team at Access is constantly updating our marketing habits to help prevent our listings from falling victim to fraud. How can you avoid rental scams at your listing? The truth is that you may not always be able to prevent it. BUT there are several things you can do to reduce the risk of a rental fraud! In this post we will go over the best ways to avoid rental scams at your investment property.
What is a Rental Listing Scam or Fraud?
Rental listing fraud occurs when someone other than the manager or owner creates a fraudulent rental listing for an actual property that is currently for rent. This is typically how rental scams work:
- The fraudster steals pictures and a description from the original (actual) for-rent listing.
- They will re-post the listing with their own contact information on Craigslist.
- When a prospective tenant finds the fake listing they contact the fraudster thinking that they are contacting the true owner or manager of the property.
- The applicant is then asked to send funds – normally the security deposit or first month’s rent – to the person committing the fraud.
- The tenant thinks that they are going to be able to move into the property, but in fact loses all funds they sent to fraudster.
Tips to Avoid Rental Scams
1. Use Custom Signage
One way to avoid rental scams is by using custom signage with your brand and/or contact information. This helps prospective tenants who visit the home know who is the true owner or property manager. Inform the prospect that if they have spoken to someone other than you or your property manager that they should be cautious of potential fraud.
TIP: People who commit rental listing fraud will often tell the prospect that the property owner has cancelled the contract with their property manager and to ignore the signs in the yard!
2. Don’t List Your Rent Too High-Know Your Market
Another way to avoid rental scams is by pricing your rental listing according to the market. This is very important because fraudsters will often look for overpriced or “stale” listings. A stale listing is one that has been on the market for a relatively long time. We have some blogs about how to determine your market rental rate that you can check out, too.
TIP: Fraudsters will look for overpriced listings so they can create a new listing at a reduced rate and make it more attractive to prospective tenants.
3. Know Where Your Property is Listed
Be aware of where you are marketing your properties for-rent and ask prospective tenants where they found your listing. Most fraudulent listings are found on Craigslist. By choosing not to list properties on Craigslist, we know that if someone “found” us on Craigslist that there is an active fraudulent listing. Once we know this we can take steps to prevent any further misuse of a listing.
4. Market INSIDE The Unit
Place branded materials and application information inside the home. By placing these materials inside the home it helps validate you as the true owner or property manager when a prospect gets a showing.
5. Watermark Your Pictures
Using a branded watermark helps deter fraudsters from using your rental listing. Lately, however, we have noticed that fraudsters have been taking even watermarked pictures for their fake listings. Even so, we still believe that this step is beneficial and will deter most fraud from occurring and add credibility to your listing.
What To Do If Your Scammed
Most scammers use craiglist to post as it is the path of least resistance. If you become aware of a fraudulent listing try to find it and “flag” it. Craigslist will then be notified to review the listing and hopefully remove it. Here are some great tips from Craigslist about how to avoid scams.
We are moving into the off-season for leasing. Which means the rental market moderates and rental listings will sit on the market longer. This will present opportunities for fraud to occur. Be proactive and implement these steps in your marketing process NOW to avoid rental scams.
Do you have a strategy that has helped you reduce fraud? Please leave a comment, we would love to hear about it!