Common Rental Scams And How You Can Avoid Them

By BankBazaar | June 27, 2017

Common rental scams and how you can avoid them

Finding a decent house in a good locality, which you rent without worrying about a nosy landlord is difficult enough. Yet, there are numerous rental scams out there that one needs to be wary of. Most of us avoid moving from one place to another as much as we can, but sometimes, there’s no option but to go house hunting.

Many rely on online portals when looking for a new home, but there could be a few not-so-genuine sites or listings floating about on the internet. Yes, there are some people out there who earn their income by scamming people looking for places to rent. This is why you need to be extremely vigilant so you don’t fall pretty to these rental scams.

Additional Reading: Should I Buy A House Or Continue Staying On Rent?

Read on to know more!

Bogus real estate agencies                                                                                                                      

One of the most common rental scams that you need to stay away from are fake real estate agencies. Yup, such things still exist and you might not notice them until it’s already too late.

The most common method used by these bogus agencies to lure customers is the low prices they offer. In fact, they may just throw in bonus offers, which won’t ever see the light of day. Once they attract people with these offers and low prices, they ask for a signup fee. This fee could range from a few hundred rupees or to even a few thousand.

These sharks have the gift of gab, so they tend to be very convincing. Once you pay their ‘fees’, they will either provide you bogus documents or completely incorrect property details. Unfortunately, by the time you realise you’ve been had, they’ve vanished without a trace.

So, make sure you do you research carefully and conduct background checks on any agency you approach. Get a second and third opinion if you have to, but don’t blindly rely on every single rental agency you come across.

Additional Reading: Real Estate Investing 101

Money before the show

Here’s the scenario: Tanmay spotted an awesome deal on an online portal. The photos posted by the owner/agent looked impressive and even the description seemed legit. In fact, it was very well-written and informative, which convinced Tanmay that this deal could be too good to miss out on.

However, Tanmay had to head out of town on urgent business and did not have time to do a house-check. That’s when the owner/agent asked him to pay an advance, which is a certain percentage of the deposit or the entire sum of the first month’s rent.

Impressed by the unbeatable price, Tanmay transferred the money. On returning, he called the  agent, but the number was unreachable. He even went to the address shared with him via email, but the property turned out to have already been rented to someone else. To make matters worse, the tenants had never even heard of the agent that Tanmay was in touch with, while the landlord had never heard of Tanmay.

So, what went wrong? Well, if anybody asks for money or a small advance before showing the property to you, do not agree to pay it. In fact, be vigilant at all times rather than just signing on the dotted line of the agreement in haste.

Most online fraudsters are great at making their listings look genuine. In fact, even when you finalise a property, it’s good to enquire about it with the neighbours or the security guard of that residential building.

Additional Reading: A Brief Guide To Investing In Real Estate

Landlord out of the country

Here’s the scenario: Mr. X, a fake real estate agent found a vacant property, which happened to be owned by someone who doesn’t live in the same city anymore. Mr. X then met prospective tenants offering them a good deal on the property before asking them to transfer a security deposit as soon as possible. Mr. X adds that the landlord will post the agreement and the keys once the tenant transfers a certain amount of money.

Unfortunately for his ‘clients’, Mr. X left with the money and was never heard from again. Remember, don’t make any money transactions until you do a thorough check on the property as well as the real estate agent listing it.

Additional Reading: 5 Useful Tips for Your House Hunt

In the world of copy-paste

We live in the world of ‘copy-paste’. Almost anything on the internet can be copied and pasted elsewhere. There’s so much duplicate content online that it wouldn’t be a surprise to find something you wrote a long time ago posted (pasted) on another site with no credit given to you.

Well, such things happen on real estate portals too. This is how it happens: A genuine landlord who resides outside of India posted an ad about his property in India on an online portal. Mr. X, the fake real estate agent came across it and downloaded the photos, twisted the content a bit and re-posted it on a different online portal at a much lower price.

Mr. X managed to get the attention that he wanted since he posted about an attractive piece of property at a too-good-to-be-true price. Most times, offers like these will display a low rent, but high security deposit. Why, you ask? Well, Mr. X, being the scammer that he is, wants to take off with as much money as possible. So, he will demand a high security deposit and then disappear.

If you spot any fake listings on any website, make sure you report it. If you get scammed by any such fake real estate agents, lodge a complaint at the earliest.

Additional Reading: How To Evaluate A Property And A Builder Before Buying A House

It’s all about the deposit

Imagine this scenario: When you rented the property you’re living at, the landlord seemed like a very affable fellow. However, ever since you informed him about your plans to move out, he suddenly started displaying slightly shifty behaviour, which only got worse whenever you ask about your security deposit.

Yup, this is one of the most common behaviour traits displayed by landlords in India since they don’t like the idea of letting go of the deposit. In fact, they come up with the craziest reasons to withhold your security deposit.

The landlord may point out repair work that needs to be done or may cite damages to the property (invisible to your eyes) after you move out. To be on the safer side, you ought to take photos of the place before you vacate it. This way, you will know if the landlord is making things on purpose.

If your money still doesn’t materialise, use these pictures to convince your landlord that the property wasn’t damaged when you left. If your situation still doesn’t improve, you may have to file a case to get your money back.

Additional Reading: Single Women Buying Property: What To Remember

Now that you know about some of the rental scams out there, next time you go house hunting online or offline, make sure you always have your wits about you. And if you come across any scammers or rental scams online, do your best to report the issue rather than just letting it go.

Planning to invest in a property – either to rent out or for you to stay in? Go ahead and explore our Home Loan offers!

Additional Reading: Home Loan Handbook: All Questions Answered

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