Rental Scam Alert!
It is amazing what some people try to get away with in this World; it’s even more amazing what they actually do get away with. I recently had lunch with a good friend of mine we’ll call Frank. Frank lives in a posh gated neighborhood in ritzy Tampa bay. I had been over his house at least a dozen times and noticed nothing odd, except perhaps the same broken lock-box on the door handle from when he first moved in. It’s your average 5 bedroom 5 bathroom cookie-cutter mansion. Frank has been renting his place for just over 15 months. There is just one problem, no one told the home owner.
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That’s right! Frank has been renting the home and giving his money to an impostor. Turns out the out-of-state owner had no idea his home had been rented, occupied, and live in since the property loan had first defaulted back in late 2008.
About a week ago he lay resting on his couch when a Realtor barged in and began showing the home to potential buyers. Frank’s sudden shock quickly turned to confusion, skepticism, and eventually anger; angry towards the scam-artist landlord and anger towards himself for getting played.
The police were called and Frank was let off with a warning. Frank cooperates fully with the police and gives them all the information he has on the out-of-town “landlord”. The police officer says it is unlikely they will find the individuals responsible, and that this is a common “scam” trend these days. The owner gives Frank just one week to leave the home.
Frank later tells me there were always some things that did not sit right with him when he first moved in.
Out-of-town Property Management Company: It is common for home owners to move out of town and continue renting their property, but why would an out-of-town owner utilize the services of an out-of-town management company? This alone does not constitute fraud, however a property management firm cannot effectively do their job if there only office is located 300 miles away (in Miami).
A Lock-box Without a Key: Over 15 months ago Frank first called on a property for sale on a Craigslist advertisement. When he went to see the home in person he was told that the lock-box was malfunctioning and that he would have a locksmith there at the time he was to arrive. When Frank showed up the locksmith was just finishing up and handed him a copy of the door key. Frank was instructed by the poser landlord to leave the key under the doormat when he leaves. Frank silently thought, “Why not just fix the lock-box?”
I’m Giving You a Sweet Deal: That’s just what Frank got. He was living in this palace for $1,100 a month. Market rent put the home around $1,700 and Frank knew he was getting a deal. “Why are they renting it for so cheap?” Frank thought, “Better not ask, they might get wise and raise the price on me before I sign. Besides their office is in Miami, they probably don’t know the Tampa market. Their lose equals my gain.”
Any one of these flags is not cause for immediate concern, but they could be explored further. Next time you talk to a seller or a buyer, visit a home, or inspect a property and you are confused by something said or witnessed, say it aloud. Ask the seller questions. It not only shows that you are paying attention but that you are skeptical and have questions. Remember you are not buying a Frisbee; the investment of a home and/or investment property is a huge purchase and commitment obligation. So keep both eyes open.
Now go make some money!