Florida has one of the country's most thriving real estate and rental markets, and one factor behind this phenomenon is the massive number of people who want to move into the state. It saw the highest influx of new residents in the last two years, 221,000 in 2021 and 319,000 in 2022. That's half a million people in just two years.
Sadly, that's also the number of people who may be most vulnerable to housing rental scams in Florida. These scams have happened for years; victims lose millions of dollars yearly, and most have no viable recourse to get their money back.
As a Community Association Manager, I have helped several people caught up in a rental scam. The last couple accepted job promotions and were excited to move from Wisconsin to Florida. They were both grad school scholars and had done plenty of research before taking the new jobs and a place to call home. Unfortunately, the scam was more sophisticated than usual.
Tom and Patricia arrived in my office with the anticipation of moving into the community. They showed up with all of their possessions and U-Haul in tow.
Immediately, this was a red flag as we had no scheduled move-ins for the month.
Upon further research, it became apparent that they were victims of a malicious scam.
"In our eagerness to get settled before starting our new jobs, we found a home via an online search. It had everything we wanted in a home, and the location was ideal. We spoke to a person representing himself as the owner. He even sent us extra photos and a gift card to have lunch before we moved in. As standard practice, we sent him the application fee, security deposit, and first month's rent. We pre-arranged that we would meet him at the site today and pick up the key. Once we arrived, the number and email we had for him no longer worked. We came by the HOA office thinking you could help us. -Tom Cartwright-
This scenario went from bad to worse quickly. The actual owner of the house was different from the person Tom and Patty had been speaking to. Someone had randomly decided to fraudulently list his vacant home as a rental without his knowledge, taken exterior photographs, and added some interior pictures from a housing site. Of course, by now, the scammer was nowhere to be found. We filed a police report and processed a fraud claim with the bank for the cashed payments. The officials told Tom and Patricia this is a frequent occurrence in Florida. We are sorry, but there is little we can do.
Tom and Pat could not retrieve the money and were about to start jobs without a place to call home. Luckily, I connected them with a legitimate real estate agent to help them get approved for a different location quickly.
Although my assistance helped resolve their issue of securing a residence, the financial devastation and mental stress would last a lifetime.
The reason these rental scams succeed
It's important to understand that many such scams succeed not because of how elaborate or sophisticated they are but because, in most cases, they are easy to spot if you follow the proper practices for searching and vetting rental properties. These scams succeed because they exploit potential renters' financial desperation.
Florida is among the top ten states with the most cost-burdened renters, which pushes many people to hunt for better rent options aggressively. Scammers use this mindset to trap unsuspecting people simply seeking an affordable rental option for themselves and their families.
Variety of rental scams
Home and vacation rental scams in Florida are the two most common housing rental scams.
Home rental scams
Home rental scammers are frauds that exploit people looking for affordable rental places. The scammers pose as the owner/landlord of properties in the market that are usually priced below the average rent of that area and, hence, attract many potential tenants.
Once the tenants contact them, they request an application fee to start the rental process. Sometimes, the scam ends here, and the tenant realizes and figures out days later, after wiring that payment to the scammer, that they have sent the money to the wrong person. The scammers move forward, snaring several others, further trapping the unsuspecting tenants. The scammers continue to collect security deposits, often from several people, for the same property.
Since Florida has no laws specifying how much money a landlord can ask for the security deposit (though the typical practice is between one and two months' rent), the scammers have a lot of wiggle room with the amount. They may even ask for multiple months' rent upfront, especially if the tenant's financial viability (like a weak credit score) is questioned. Once the tenants try to move in, they realize they have been scammed, and the person they sent the money to cannot be traced.
Vacation rental scams
As one of the most popular vacation states, Florida receives millions of local and overseas visitors yearly. The highest number so far was in 2022, at around 137 million. With such a high influx, many people seek options other than hotels, including direct short-term rentals on social media platforms or rentals facilitated by services like Vrbo and Airbnb. Since the standard practice with such rentals is that part or all of the payment has to be sent upfront, it has become a ripe environment for vacation rental scams.
Scammers often post fake pictures of the property and copy listings from other legitimate sources to scam tourists.
How to avoid rental scams
It's important to understand that most rental scams in Florida are riddled with caution flags that are relatively easy to spot if you know what to look for. However, some elaborate scammers are difficult to spot and identify. Suppose you know what red flags to look for and follow best practices. In that case, you will significantly increase your chances of staying safe from a housing rental scam or, at the very least, have enough information for authorities to trace the scammer.
Learn to identify and avoid the red flags.
The most common red flag is the rent amount: Low rent is one of Florida's most apparent red flags regarding housing rental scams. If you find a listing with rent far below comparable properties in the area, your first instinct should be to dig deeper. It's understandable if the property has specific problems, and the legitimate landlord openly communicates them and helps you understand why the rent is so low.
However, it may be an outright scam if they dodge the question, ask you to rent it without checking it out, or send in a hefty application fee before even showing the place.
Frequently, the listings themselves may give you a clue. They may have bad grammar, inconsistencies, no photos/stock photos, etc. If you find a listing like this, it's a good idea to contact the person, talk about the property, and determine whether there is a legitimate reason behind the sloppy listing.
Scammers usually use legitimate photos from other listings, often from different cities. These photos may belong to current or former for-sale or for-rent listings. The easiest way to identify if these photos are taken from another listing is to reverse-search the images. You will be able to trace them back to the original listing. If the other details of the listing match and the only difference is that the photos are on another website, it's a dead end. However, if the images are from a completely different listing, you know that at least one is fake, and you can contact the other one and ask why their pictures are being used in another listing.
Payment methods and urgency
Scammers often take advantage of the urgency in a hot market to get potential tenants to send in the money, typically via online apps like Zelle. If they meet you in person, they may ask for cash. Their goal would be to receive a payment that may be difficult to trace back to them. Similarly, it's most likely a scam if they ask for a fee to an overseas account, citing that they are outside the country.
Avoiding in-person meeting
Most scammers will avoid meeting in person or ask for full/partial payment to "hold" the rental for you before they meet you. However, you may never see them again once you've sent the money.
Scammers may discourage or dissuade you from physically visiting the place. They may say it's occupied, unavailable to show the home, or unable to send someone. Remember, always insist on a physical visit before signing the contract. There have been sophisticated scams where these red flags were absent, and the person pretending to be the homeowner even showed their ID and had the keys to the homes. They managed to pull off the scam but were caught because the potential tenants went beyond simply looking for the red flags.
- Look into the property ownership. The data is available on the appraiser's website. If the name doesn't match the name on the listing and it's not explicitly stated that the person who made the listing was the agent, not the homeowner/landlord, dig deeper.
- If the person who made the listing online agrees to show you the property, ask for their ID. Many landlords prefer to work through property managers/management companies, and if someone is claiming to be a company's representative, try to contact the company to verify their claim.
- If you are signing a contract and handing over deposit money, take photos of everything. Don't complete an online form unless you are sure you are dealing with a legitimate landlord or representative.
- If you use social media platforms and marketplaces, remain cautious and ask as many questions as needed to confirm that you are working with a legitimate landlord. Better yet, use reputable rental websites.
- If possible, work with an agent.
The bottom line
Housing rental scams in Florida are a significant problem but can be avoided with the right approach and caution. If you identify a fraud, report it to the relevant authorities to save others from falling into the scammers' traps.
This article is for informational purposes only. It should not be considered financial, real estate, or legal advice. The market fluctuates; therefore, not all information will remain the same. Consult a financial or real estate attorney before making significant real estate decisions.