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How to avoid rental scams


Tips to protect yourself.

Handing over a deposit to secure that perfect rental property you’ve found may seem like a no-brainer – especially when you’ve been searching for a while. But don’t book the removalists just yet.

According to Scamwatch, it’s all too easy to fall prey to a rental scam – and even more important for Australian renters to do their due diligence. In a competitive rental market, scammers target vulnerable people, so these types of scams were particularly rife during the pandemic and are continuing.

Our handy guide below outlines where scammers are likely to operate and how you can avoid being targeted.

What are rental scams?

Essentially, rental scams trick you into paying money for a property or accommodation that’s not actually available. If you fall for the scam, you may agree to pay an upfront deposit before moving in, or provide personal information in order to secure the property.

Experts say virtual inspections of rental properties during Covid played a large part in the number of scams reported during the pandemic as renters may have had to accept a property and pay a security deposit without physically walking through it first.

But the risk isn’t over – scammers are still operating all over Australia.

Where can you get scammed?

Social media, online marketplaces, classifieds-type websites and other non-real estate sites are typically where scammers might advertise properties. And if you innocently post on your socials that you’re looking for a room to rent, a scammer might target you directly. Others might impersonate real estate agents.

If you express interest, the scammer may send you a ‘tenant application form’ to fill in – and it may request copies of bank statements, passports or payslips. This is essentially phishing for your personal details, which can expose you to identify theft.

Scammers may also demand you pay a bond or upfront rent to hold the property, saying they’ll provide the keys once the money’s gone through or your personal information has been provided.

Some victims of rental scams only realise they’ve been scammed when the keys don’t arrive or they’re told the keys will be left in a certain spot but they’re not there. Or, the person may turn up at the address only to find the property doesn’t exist or is currently tenanted. By that stage, the scammer’s long gone – most likely with the victim’s money and personal details.

How can you avoid rental scams?

There are lots of ways to protect yourself from rental scams. Here are our top tips:

  • Do your research. And don’t believe everything you’re told. Search the address online to make sure it exists or if it’s listed by a different agency. If you’re dealing with a real estate agent, check online that they’re actually licensed via Fair Trading’s property services license check.
  • Rent properties through reputable means. That means a licensed agent or property management agency. If the ad is on Facebook Marketplace, Gumtree or another classified ad platform, you’re taking an increased risk. If you do take this route, ask for evidence of ownership and confirm the identity of the owner you’re renting from.
  • View the property ahead of time. Don’t be put off with excuses about not being able to view the property because the landlord is overseas, or being told that virtual inspections are the only option. Demand to view the property in person.
  • If communication is just via email… this is a red flag and something scammers do to avoid identification. The ACCC advises searching for a phone number and speaking to the property manager over the phone or arranging a meeting or viewing. Only deal with real estate agents or landlords you can meet in person.
  • Never pay upfront. One of the most common scams is to be shown gorgeous photos of a property and asked for a deposit before you’ve seen the home in person. However, unless you’ve met the agent or landlord and viewed the property, never hand over money. Only do so in exchange for a signed lease agreement and the keys!
  • Investigate anything dodgy. If you’re given bank account details that are in a different name to the real estate agency or the landlord, look into this before transferring any deposit or rent money. And if it checks out and you pay a rental bond to the landlord or agent, by law it needs to be lodged to the relevant tenancy bond authorities within 10 days – and you’re then given a receipt. If that’s not supplied, find out why.

It’s no secret the rental market is hugely competitive in Australia right now, making it easier for scammers to target people. After all, if you’re constantly missing out on property, you might feel desperate enough to do anything to secure a home and sign on the dotted line.

But following the steps above and being vigilant can save you losing out financially and avoid heartbreak. Always remember that if a deal sounds too good to be true, it probably is.

And if you do find yourself the victim of a rental scam, act quickly to reduce the risk of being financially compromised or a victim of identity theft. Contact your bank ASAP, contact the platform you were scammed on (if relevant) and check out Scamwatch’s resources for help.

This article is intended to provide general information of an educational nature only. Information in this article is current as at the date of publication. We do not recommend any third party products or services and we are not liable in relation to them. Any links to third party websites are for your information only and we do not endorse their content.

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