Ever since the COVID-19 rental moratorium ended rental scams have been on the rise here in WA.
In fact, in September 2020 the Australian Competition and Consumer Commission (ACCC) revealed that Australians had reported losing over $300,000 in rental scams – a 76% rise compared with the previous 12 months.
So what are the warning signs of a rental scam and how do you avoid losing money to one?
How scammers prey on vulnerable tenants
The economic effects of COVID-19 weren’t spread evenly throughout our society. Employees working in certain sectors such as hospitality, tourism and the arts bore much of the fallout from closed borders, lockdowns and social distancing. These sectors also tended to disproportionately be staffed by renters, many of whom are younger people.
In March this year, the government ended its JobKeeper subsidy and significantly reduced the amount of the JobKeeper boost. At the same time, the rental moratorium ended. Added to this, Perth rents have been rising. The result is that a lot of prospective tenants need, and are actively searching for, cost-effective accommodation.
Unfortunately, scammers realise this and are attempting to lure vulnerable tenants with the prospect of cheap rent. Many have placed ads in online classifieds or real estate portals. Others have approached people directly via Facebook and social media, especially those publicly posting that they’re looking for somewhere to live.
What the scam looks like
Generally, scammers will operate only by email and social media. They may use the free ads on classifieds sites like Gumtree to promote properties. Sometimes they have an email address that looks very similar to that of a licensed real estate agent or property manager but won’t be quite the same.
When someone takes the bait and inquires, usually, the scammer will tell the victim that they can’t show them the place they are inquiring about, at least not from the inside. The scammer may give an excuse that they’re based overseas and can’t let the tenant through the door. Often the victim needs somewhere to live so badly that they’re prepared to pay for something sight unseen. That said, ASIC has reported that in rare cases, scammers will dress as real estate agents and actually allow would-be tenants to inspect the property they claim is for rent.
One thing that the scammers always do is to ask for something upfront. That’s often a month or two of rent. Once the target pays that money, email and social media accounts get closed and the scammer is never heard from again.
Sometimes, however, scammers have asked for identification, including bank account and passport details. They’ve also asked tenants to fill out fake online forms providing personal information. They’ll then use this to steal the victim’s identity and perpetrate other cybercrime.
7 ways to avoid a rental scam
Once you’re aware of rental scams and how they work, they’re not as difficult to spot and even simpler to avoid. Here are our tips for getting one up on the scammers.
1. Make sure the property actually exists and that you can view it. We always include a watermark on each photo we post online so that you know it’s authentic.
2. Only ever rent through a licensed real estate agent or property manager. If you’re in doubt, contact the Real Estate Institute of WA (REIWA).
3. Check the email address that you’re receiving information from very closely. Make sure it aligns with the actual agency addresses posted on their website.
4. Never give your personal information via an online form unless you know the source. If in doubt, go directly through the agency’s website.
5. Pick up the phone and call. We’re always happy to speak with tenants to confirm we’ve sent them something. To be extra cautious, go through the agency’s main landline number and not the agent’s direct mobile.
6. Don’t pay money unless you’re 100% certain. Again, if in doubt, pick up the phone and call the agent.
7. Make sure the paperwork checks out. WA law requires a tenancy agreement, property condition report and bond lodgment report. You should always make sure you receive these and that they’re accurate. You can read more about what the law says on the WA Commerce website.
If it looks like it’s too good to be true, it probably is. The Perth rental market is very competitive right now, with rising rents and low vacancy rates, so it’s increasingly unlikely you’ll find the deal of the century.
If you’d like to know more about the current state of the Perth property market, get in touch.