Unfortunately, there are people out there trying to run real estate scams on the unwary and ill-prepared. As the real estate market continues to rise we are sad to say this trend of scammers will only continue.
Since rent-to-own homes are an exception and not the rule in the real estate world, it is important not to get bamboozled by a lowly scammer looking to make a quick buck. The good news is there are far fewer scams surrounding the rent-to-own home market than the rental market.
Also, rent-to-own homes tend to be more of an option for first time home buyers that means most of our readers are currently renters, and rental properties are where most scams in the real estate world occur. Here are some red flags to be mindful of when looking for rental property and some tips to help avoid the scammers.
Lower price point than surrounding rents
Be wary of any property that has a significantly lower rental price than the surrounding properties. While this doesn’t always mean it is a scam, there is a significantly higher chance that someone is up to something no good. The same is especially true if the property appears to be in relatively similar quality to the surrounding properties.
Asking for money up front before showing the property
Anyone dealing in good faith in the rental industry should know that folks will want to look at a rental property before even deciding to apply for the rental. If someone is asking for a fee just to take a look at the property then immediately stop all communication as it is a sure sign of a scam.
Refusing to answer questions about the owner
Always ask for the name of the owner. If the person showing the home is not able to provide that information or more importantly is unwilling to give that information, then it is probably a scam. Sometimes a scammer will discover a vacant home, gain access and start trying to rent out the property only to run off with the first month, last month, and security deposit. Avoid these situations if possible by asking the right questions.
Know your state laws
Many states in the US have tenant protection laws that prevent individuals from taking unfair advantage of renters. Read up on those rules and get familiar with what the local rental business considers the standard. Reading up can give a solid basis to help identify any potential scams through issues with fees, deposits, and legal lease terms.
Read the legal documents
Read all the legal documents the landlord or agent provides. Everything from the application forms to the lease agreements should be read thoroughly to ensure that all the terms are agreeable and up to state law standards.
Avoid using cash
Always avoid using cash in any real estate transactions. Any form of untraceable funds should send up a red flag immediately. Including wiring money, Bitcoin, Moneygram, or any other cash equivalent payments.
Take a look at our rent-to-own home listings instead and start building your wealth today.