Now that the housing market is crashing and prices are falling. It has become a very risky time for people to buy real estate and there are far less buyers out there. So this means that the rental market is becoming very strong and more and more people are looking for places to rent rather than buy. This high demand for rental houses creates a perfect opportunity for con artists.
This situation has caused the ultimate real estate rental scam to surface. In this scam a con artist will pick an area with a hot rental market where rental houses are in high demand.
The con artist will go to a vacation rental website such as HomeAway.com and pick an appealing house that’s in a relatively residential area rather in a prime tourist area. The con artist will book this house as a weekend rental either on this website or over the phone.
The con artist will then take photos and information on this house from the vacation rental site and place a free rental ad on CraigsList.com listing this house as a rental property with a 12 month lease.
The con artist will set the rental price of this house low, but not to the point where it’s unbelievable. So if this house typically rents for $2,000 a month, the con artist would place an ad saying that the rental price is $1,200 a month with a 12 month lease and one months deposit. This seems like a great deal.
The con artist would list a contact phone number and take calls from the prospective renters and answer their questions. But he would not provide the address of the property on the CraigsList ad or over the phone until the prospective renters are ready to set up an appointment to see the property. He will mention on the phone and in the ad that the address is not provided because they are worried about too many people disturbing the current tenants who are leaving at the end of the month.
From this CraigsList.com ad the con artist will get calls from +30 people who are interested in renting the property. So the con artist will set up appointments for people to see this property on Saturday of the weekend that the con artist is going to be renting out this home. The con artist can easily space out the appointments an hour or so apart to avoid the prospective renters from running into one another.
When people show up for their appointments to see the rental property, the con artist will show them the property and pretend that he is the owner. He will say that the current tenants will be leaving at the end of the month to account for the furniture in the place.
The prospective renter will like the property since it is way under-priced and will badly want to rent the place because it seems like such a great deal. The con artist may then tell them that they have a few other people who might be interested in renting the place to get this prospective renter even more antsy. The con artist will go on to say that his time is limited or that he is from outside the area and he would like to have the place rented by the end of the weekend.
So the con artist will have this prospective renter fill out a generic application form with his personal information and permission to run a background and credit check. He will send them on their way and say that he will give them a call once he has run the background and credit check.
An hour or so later the con artist will see the next prospective renter and do the exact same thing. The con artist may see as many as 10-12 prospective renters this Saturday, all of which who really want to rent this property.
The evening after the con artist has seen all the prospective renters and collected their applications, he will start calling the prospective renters one-by-one saying that he ran their credit and background information and he has picked them to rent the property. The con artist will go onto say that he would like them to sign the lease and leave their deposit by the end of the day tomorrow (Sunday).
The con artist will remind the prospective renter that he still has multiple people who are interested in renting the property, but they are taking too long in getting back to him. This will put pressure on the prospective renter to move quickly to get the deal sealed. This may also make any less desirable renters feel that they were picked as tenants for this property due to the limited time that the owner had in getting the property rented and will cause them to jump on this opportunity.
The con artist will request that the prospective tenants pay him the full first months rent plus one months deposit $2,400 at the time of lease signing. He will ask them to meet him either that night or sometime on Sunday. If the prospective renter cannot pay for one full months rent plus deposit - $2,400, the con artist will settle for a smaller $300-500 deposit to hold the property.
The next day on Sunday the con artist will spend the entire day meeting with the prospective renters one-by-one in appointments spread through out the day, having them sign fake leases and then collecting their first months rent plus deposit or smaller deposit amounts.
The majority of these 10-12 prospective renters that the con artist has called back will show up to sign a lease and either give him cash, check, or money order for $2,400 (first month and deposit) or $300-500 (smaller deposit amount). So if he gets 6 people to pay him $2,400 and 4 people to pay him $400 then he will have a total of $16,000 that he has collected from people this weekend.
The prospective renters will leave the house with a worthless signed lease and a receipt indicating that the con artist has received payment from them. They will not realize that they have been scammed until they try to show up at the property at the end of the month and try to move in. This gives the con artist plenty of time to cash their checks.
At the end of the weekend the con artist will leave the property and first thing Monday morning will drive to the banks where the checks he received were issued. He will ask to get cash for the checks even though he does not have an account with this bank. Since this bank is the one where the check was issued they will have no trouble verifying the funds and will give him cash for the check. It will be even easier for him to cash the cashiers checks. If he can’t get to the bank where the check is issued, he may take their checks to a check cashing place and get them cashed for a fee.
The con artist has left town with around $16,000 that he made over the weekend. His cost of renting the house for the weekend might be around $400-500 and he might have spent $10-30 on the generic rental applications and lease agreements which anyone can buy at their local Staples or Office Depot. So over the course of this weekend he made at least $15,000 which is not a bad take for the weekend.
The prospective renters show up at the property in two weeks time and realize that they have been scammed, but by this time it’s already too late. The con artist has already cashed their checks and has left town. He is probably planning on taking his next weekend trip in another state where he can repeat this scam and make another $15,000.
So if a con artist can pull off this scam for one weekend a month for at least ten months a year then he will make a total of $150,000 a year for just ten weekends worth of work. It seems like quite a lucrative scam. I really wonder how many people make a good living off doing a scam like this one.