Sarah Holder is a staff writer at CityLab covering local policy, affordable housing, labor, and technology.
Tenant beware: Some cities are hotbeds of rental fraud, and Millennials are the most vulnerable targets.
In case you haven’t heard, we are officially in the summer of scams. There’s the fake German socialite racketeer who stole thousands before ending up in Rikers. There’s the mattress-ordering, private-plane-chartering, nepotism-wielding cabinet member who resigned, eventually, in disgrace. And of course there’s the still-unraveling “epic grift” that may lurk behind the current presidency.
Then there are the more run-of-the-mill ripoffs that have become part of the background noise of modern life, like apartment rental fraud. Think fake Craigslist deals and Zillow listings for apartments that don’t exist. In many cases, phantom landlords ask for application fees and deposits from aspiring renters before agreeing to show the place, then vanish with the cash. These kinds of advance-fee scams are all too common in the digital age, and the apartment market is no different: A new survey from ApartmentList indicates that 6.4 percent of renters have lost money in scams like this.
Unlike time-share or vacation rental schemes, which tend to target susceptible older buyers, Millennials are more likely to find themselves bilked while trying to rent an apartment: According to the report, “renters aged 19 to 29 are 42 percent more likely to have lost money due to rental fraud.” A little more than 10 percent of this age cohort has been victimized, and a third of them have lost $1,000 or more.
While rates of fraud were higher than researchers had initially anticipated, responses were drawn from a sample of fewer than 2,000 renters, and there isn’t much historical data to measure trend growth against. But since these scams are targeting younger, more vulnerable renters, the stakes of identifying them are high. “We think that younger renters and those who are more desperate for a deal are both more likely to be scammed and to be hit harder by the scam,” said Sydney Bennet, an author of the report. “If you’re really struggling to find an apartment you can afford and you lose on a fake deposit, you might not have enough money for the next apartment.”
Common tricks include the “Bait and Switch,” where tenants show up to a rental address and it looks nothing like the apartment they saw—and paid for—online, or the “Phantom Rental,” where landlords make up places entirely to secure a deposit or a social security number, then ghost. Some landlords just copy legit ads from building websites and copy them verbatim into new Craigslist postings, changing only the contact info. Others try to rent out apartments that are already filled, cashing in on application fees with no intention of actually leasing rooms out. A few renters said they’d actually moved into a building only to be kicked out a few months later, after realizing their landlord had sold them an apartment with the knowledge that it would soon be foreclosed upon. Landlords lie to tenants about amenities like heat, A/C, rooftop patios, or laundry (which ApartmentList recently deemed the “hardest amenity to find” on the current rental market). Apartment fraud victims are also in danger of having credit card numbers, bank data, and other personal information compromised.
Digital natives who have grown up in the age of photoshop, airbrush, and Omegle might think we’re too savvy to fall for such online fraud tactics. Indeed, one might expect younger renters to over-diagnose scams. Bennet, who was apartment hunting while conducting the survey, says she found herself constantly second-guessing the plausibility of listings she encountered before settling on one she decided to trust. (“Though I guess I haven’t moved in yet,” she realized on the phone.)
But just as Millennials are more likely to be renters, period, they’re also more likely to feel the need to snap up apartments in high-stakes housing markets, sometimes sight unseen. They may have less experience with the process of vetting an apartment, and are dealing with a life transition full of distractions. People who fit these profiles—recent college grads hunting for a cheap place in a high-cost city, quick, most of them without the aid of a realtor—can be vulnerable to offers that prove to be too good to be true.
Atlanta, D.C., Denver, and Las Vegas, where Millennials are scrambling to secure high-rent housing, were the worst offending cities, with New York City not far behind. There, almost one in ten respondents reported losing money on rental fraud. San Francisco and L.A. had the highest rates of fraudulent listings reported—but perhaps because renters there are woke to the extra-abundance of risks, fewer people have lost money there (less than one percent in San Fransisco and 2.2 percent in L.A.).
The good news is ApartmentList found that most victims of rental fraud get wise. “We don’t see many people fall for these scams twice,” Bennet said. The biggest fraud-avoidance tip she has to offer? Renters need to check out places in person before sending in a deposit or any sensitive information: 35 percent of once-fooled renters said they “now visit apartments before signing a lease or paying a deposit.” And if you’re really not able to physically see the apartment, try to send a friend.
Other tips: Do more research. You can cross-reference city records on property ownership, reverse-image-search pics of the apartment, and contact current tenants. Change search platforms. Check your lease for the amenities listed online, because if they’re not there, the landlord isn’t technically obligated to provide them. Never respond to demands for security deposits before signing the lease. And once you’re ready to send money, avoid cash and wire transfers, which are harder to track—and avoid landlords who insist on those modes of payment. This advice squares with guidelines from the Federal Trade Commission, which urges scam victims to report the crimes to the FTC directly, as well as with local law enforcement.
Maybe all renters should just keep this in mind: In 2018, everything’s a scam until proven otherwise.