How to Avoid Scams During Your Apartment Search

Millennials are delaying purchasing homes and instead, renting apartments until later in life. However, rent continues to skyrocket in metropolises like San Francisco and New York.

According to the website Rent Jungle, the average monthly cost of renting a one bedroom apartment within ten miles of San Francisco as of May 2015 was $3213. The growth in rent prices over the last few years has been astronomical: In July 2009, the average cost of a one bedroom in San Francisco was $1416.

San Francisco is in a unique position due to the influx of well-paid tech workers over the past decade or so. The city’s high rent has eclipsed even New York City’s prices, according to the Rent Jungle calculations for one bedroom apartments (the average price in NYC for May 2015 was $3039). By comparison, the average rent for a one bedroom apartment in San Antonio, Texas, was $820 in May 2015.

Renters, especially recent college graduates, in expensive cities like San Francisco and New York City will likely end up having to fork over more than the recommended percentage of income that should be spent on housing.

In cities with competitive renting markets, renters may want to move quickly to snag a seemingly excellent deal. It’s important, however, to do sufficient research beforehand to ensure that you aren’t stepping into a scam that actually is too good to be true. Come up with an apartment hunting checklist to ensure you're covering all of your bases before you even start looking. 

Avoid these types of rental scams

I’m currently searching for an apartment in San Francisco and learning the ins and outs of evaluating listings posted on craigslist. No pictures? This might be a bad sign, or it could stem from safety concerns of the current tenants. In one undeniably sketchy situation I’ve experienced, a landlord I contacted online wouldn’t send pictures or even show me the apartment—he had moved across the country, or so he said, and didn’t know anyone in the city well enough to leave the keys with them. If I filled out the application, he told me (and presumably paid a security deposit, I didn’t even bother looking at the application), he would mail me the keys. Right.

The Federal Trade Commission (FTC) provides information on its website about rental scams and how to avoid them. According to the FTC, scammers may “hijack ads,” by reposting real listings with their contact info instead of the contact info of the actual landlord. Scammers may also create listings for places that don’t exist, or that aren’t for rent. If the price of the place you found online is much lower than anything else in the surrounding area, this may be cause for concern.

Other signs that you may be walking into a rental scam, according to the FTC, include landlords asking you to wire money, landlords requiring a security deposit or rent payments before you’ve met them or signed a lease, and landlords claiming to be out of the country. Sara Gates detailed her experience with a craigslist rental scam in the Huffington Post in 2014—the apartment she paid the first and last month’s rent for, and even received keys to, wasn’t actually for rent.

Scammers may not necessarily be after your money; rather, they may be collecting personal information for the purposes of identity theft. Be wary of giving your social security number, driver’s license, etc. out to someone you haven’t met for a listing you haven’t seen. You can report rental scams to the FTC here.

While apartment hunting in Los Angeles two years ago, my roommate and I found a listing that encouraged potential tenants to simply walk inside the unit to see it—the door would be unlocked, according to the listing. We visited the unit, and the door was in fact unlocked. Unfortunately, a family was also living there. They had rented the apartment months ago, they told us, and they had been trying, unsuccessfully, to get the listing removed from rental websites.

While this wasn’t a scam, it taught us to take everything we saw on a website with a grain of salt. There’s no substitute for an in-person visit from you (or if need be, a trusted friend). Not unlike dating profiles, posturing is the name of the game when presenting real estate, and a picture taken ten years ago might not reflect the current reality.

What to have handy when renting

In cities with highly competitive rental markets, renters may need to have documents like a renter’s resume and proof of income (bank account statements or an offer of employment) on hand for open houses and viewing appointments. Landlords often charge an application fee to run a credit check on applicants. Printing out your credit report and score might save the landlord’s time or give your application a boost, but landlords may want to run their own credit check regardless.

You should also check the listed rent against the rent of other, similar units. This will help you make sure that the rent being offered is a fair market price, and it's a particularly important consideration if you're moving to a new city and are unfamiliar with the rental market, according to Rental Scams, a blog providing transparent market value for rental units. 

What to look for

There may be room for crying in baseball, but there’s no room for deference or gullibility when viewing an apartment. This is the time to ask questions, and then ask more questions. Who pays which utilities? Are pets allowed? Am I allowed to hang pictures up with nail or thumbtacks, and am I allowed to paint? Do I need renter’s insurance? (Some apartment complexes will require renter’s insurance covering a certain amount). Research any and everything else that’s of importance to you: Does the apartment get natural light? How’s your cell phone service? Walk around the neighborhood at night, if you can, to gauge if there’s a marked difference from how the neighborhood seems during the day.

What to ask before signing a lease

Once you have a lease in hand, read it, and don’t hesitate to ask additional questions. Who do I call if something breaks? Are there rules about playing music or having guests over after certain hours? Make sure all appliances work, and take pictures. When you’re moving out and trying to get your security deposit back, these could come in handy if you need to demonstrate that a particular mark or scratch existed prior to you moving in.

In the midst of the stress of trying to find a suitable apartment, it may be tempting to let all such inquiry fall by the wayside. But a yearlong lease, which is the length of many initial leases, is not insignificant—better to find out about any challenges or deal-breakers before you sign a lease, rather than two months in. It also may be wise to ask your landlord what would happen if you did need to break your lease due to extenuating circumstances (and get this answer in writing, if it’s not already in the lease).

In expensive cities with a competitive markets for renters, the process of finding a suitable and non-budget-busting apartment may seem about as fun as a root canal (and much more drawn-out), but extensive research and preparation will at least aid the process and help protect against scammers.