Imagine finding the perfect rental home for a young family; the location, size, and price are all ideal. They even love the layout and color scheme. However, on moving day they find another family living in their new home who claims to have a signed lease agreement with (an unknown) property owner. So now you're in charge of a chaotic situation, and you have no idea what to do next. Should you call the police or try to track down the fake owner? The people who have been scammed want their money back--and they won't be pleased about being homeless, while your tenants are anxiously waiting for keys to their new place. How can you prevent everyone from losing their cool?

The property owner thinks you made a mistake and wants an explanation, but you're still trying to help your new tenants move safely in like promised. Meanwhile, you have to investigate what went wrong and try to get the old tenants who just moved in, out.

This is a prevalent scenario. A July 2018 survey by Apartment List found that 6.4 percent of United States renters had lost money to rental fraud, resulting in an estimated 5.2 million U.S. rental fraud victims per year. Out of those surveyed, 43.1 percent said they've come across fake listings before.

Avoiding fraud is crucial for property managers because not only does it cost time and money, but it also damages your reputation. If you spread the news about being scammed, people will be less likely to use your services in the future, even years from now. So take some precautions! Whether you manage properties as a side hustle or a full-time job Professionally, avoiding scams should be at the top of your mind.

Rental scams come in many forms, but they usually involve two key components: 1) the criminals list a rental property that doesn't belong to them, and 2) try to get money from people who want to rent it.

Scammers will:

• 1. Search online for vacant or vulnerable properties to target, often taking photos and information from the official listing for their own use.

• 2. Make their own listings and advertisements for the property, offering rent below market value to attract consumers.

• 3. Sometimes scammers will claim to advertise the property for or on behalf of an owner who is a friend, family member, or business associate in order to appear more trustworthy.

• 4 Scammers will ask for application fees, deposits, rental payments, or other charges from interested parties as soon as possible.

• Since scammers have access to essential dispensers, they can easily let themselves into homes.

• If successful, they will take money from early rental payments or other leasing and processing fees. They do this by convincing people who think they’ll get a secure place to live out of the deal.

If you're trying to rent a property, be aware of scams from criminals who may not even be in your country. Nigerian scammers typically try to get marks (or victims) to send them money overseas, and in rental scams, this usually means listing properties the scammer has never visited and asking for an advance rental payment or some other fee through a money-wiring service.

Some scammers specifically target property managers and tenants. For example, a 419 phone scammer will answer an online posting and offer to pay in advance, usually through a money-wiring service. They request either a refund or that the manager returns their overpayment, which of course is never received because it was fraudulent. If the manager returns the money before confirming that the payment went through, they're out whatever amount of cash was wired.

Property Managers need to set an example of transparency for both tenants and property owners, showing them what the best business relationships with property managers look like. Additionally, as a property manager, you should keep tabs on your own vacant properties--both online and in person--to make sure no illegal activity is taking place. Lastly, screen your tenants carefully and only accept payments that clear the bank. Being proactive is always better than trying to fix things after they've already gone wrong.

Experienced property managers are able to spot rental fraud from a mile away. If you're interested in speaking with Torey Eisenman, who is a Florida-licensed real estate broker and general contractor for safe rental listings, please contact us today.