Experts may not agree on how long the effects of the coronavirus may persist on our everyday lives. But one thing is for sure, the spread of COVID-19 and the social distancing practices now implemented will change the renting process for the foreseeable future.
The way we shop for a home has been reconstructed overnight. The world has been put on hold and your ability to see the place you want to call home now comes with unforeseen obstacles. What processes, if any, have been put in place to allow you to physically tour the property while adhering to social distancing rules? What if the desired property is occupied and the current tenants do not want the added exposure of strangers?
Some may have the ability to wait out this near-term uncertainty and move into a new home or apartment later down the road. Others, who must move within the next year or so may see themselves forced into a practice seen only in our country’s major metropolitan areas or if relocating hundreds or thousands of miles away – renting sight unseen.
As technology has advanced to make virtual touring of rental apartments and homes a possibility, it has also allowed for an increase in the possibility for rental fraud. If you are a prospective tenant traversing this new virtual landscape, beware of deals too good to be true or go against your gut instinct.
Let us look at some of the common scams out there and then see what steps you can undertake to protect yourself against fraudulent activity.
Rental Fraud is Real!
Let me begin by assuring you that rental fraud is real. This is not some “Boogey Man” created by an anti-tech movement bucking against the evolution of the industry. Even before the COVID-19 pandemic and social distancing measures, rental fraud had cost U.S. renters millions of dollars.
A 2018 Rental Fraud survey from Apartment List found that fraudulent activity impacts millions of renters. An estimated 5.2 million U.S. renters were defrauded, and the national survey of renters found that well over 40% of renters reported either discovering or encountering fraudulent listings while searching for a new apartment.
This is just a snapshot of the growing threat rent fraud has become all over the U.S.. Now COVID-19 has created a new environment that gives another advantage to scammers as in-person tours and interactions with landlords and property managers will be more difficult. This extra layer will make it even harder for renters to determine which listings are legit.
However, there are some definite red flags you may come across during your search. Here is what to look for and how you get around them.
The Most Common Red Flags!
1. Too Good to be True
If you see a listing with “out-of-this-world” amenities asking for considerably below-market rent in a hot real estate area, be skeptical rather than think you just hit the lottery.
First, use Google or Apple Maps – or some other map platform - to make sure this is an actual property. Second, see if there is another listing for the same property with a higher rent. We have seen in our own property management dealings where scammers will copy listing details and create their own lower priced post.
2. Upfront Requests for Payment or Financial Information that Seem Odd
Beware of anyone pressuring you to send money immediately to reserve a property because of all the interest they have received. Also, be wary of a reluctance to provide customary information or virtual tours without receiving payment first.
A typical part of the renting process are background checks. It is necessary for landlords and property owners to validate you are who you say you are. However, there is no past so sordid that the cost of a background check would be upwards of the $45 - $60 range. If so, be very cautious going forward.
3. There is a Reluctance or Inability to Provide a Lease
If a supposed landlord or property manager objects or has excuses as to why he or she does not want to enter into a written rental agreement, there should be red flags. Even short-term or month-to-month leases will require written documentation.
How to Protect Yourself Against Rental Fraud
1. Research! Research! Research!
Even as technology has made it easier for rental fraud, it has also given renters the ability to do their due diligence in finding legitimate apartments and housing. Research comes in the form of looking up and verifying property managers through reviews on multiple platforms and sending out a “Bat Signal” to all your colleagues and friends on social media pages. These resources should be used as points of reference during the decision-making process.
2. Ask for a Virtual or 3D Tour and/or a Multitude of Photos
Once again, make technology your friend. As previously stated, even prior to the COVID-19, virtual and 3D touring of properties was trending. Now this option becomes a necessity as stay-at-home orders have been imposed across the U.S. and current tenants have a reluctance about letting strangers in their home. Virtual tours can be used to verify that the property owner or manager is who they say they are while also revealing certain nuances of the property. If the landlord or property manager can not provide a virtual tour, request as many detailed photos as possible.
3. Steer your Searches to Reputable Property Management
During a time of unknowns, do you really want to put your future living situation in the hands of another unknown variable? Reputable, known property management will make the sight unseen renting experience a little more palatable as they should be easier to research, contact and provide you with all the needed resources discussed earlier.