It CAN Happen to You: How to Guard Against Dangerous Real Estate Scams & Squatters

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A prospective tenant decides one day to take to Craigslist to find a new home. They see a property that catches their eye: well kept, great amenities, and at an unbelievably low price. It sounds like a fairytale, but there are a few not-so-happy ways this story could end.

While there are genuine advertisements for rentals on Craigslist, they have their fair share of real estate scams, too. Some tenants show up to see the property, only to find a fake landlord full of empty promises. He doesn’t own the property—he hijacked a property, claimed it as his own, and tried to coerce money from his new “tenants.” Sometimes, folks know immediately that something isn’t right. Others go as far as giving a hefty deposit to these scammers. Some dupe more than one person.

There are plenty of stories where the Craigslist ad poster claims to be an absentee landlord out of state and when the ad has a reply, they proceed to try and conduct business online and through email. These scams are easy to perpetuate and allow a scammer to reside anywhere in the world and use software such as Paypal to collect rental deposits from unsuspecting tenants. These scams rely on someone, somewhere being so desperate for a good deal that they will overlook the red flags.

Related: How to Protect Your Rentals Against Tenant Abuse (a.k.a. What I Learned From a Hoarder House)

Scarier than losing money, however, are the stories of “landlords” luring women, whether they be rental prospects or even real estate agents, to empty properties with nefarious intentions. This story from Reddit, for example, tells the account of a woman lured to a foreclosed home where a squatter was posing as a landlord. After she escaped, a police investigation revealed that he had placed fishing line at shin-height halfway down the dark basement stairs.

These fake landlords are an increasing problem—and your rental property might be a target. Anyone reading this article and thinking to themselves that this would never happen to them? Think again.

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It Can’t Happen to My Rental Property, Right?

Actually, it can. It has happened to us, a property management company, where thieves have duplicated existing ads in surrounding cities trying to attract online deposits. It happened to real estate investor and BiggerPockets Blog writer Trey Duling, who explained how a fake listing for his property appeared on Craigslist. Not all scams escalate to violence and physical theft, but even well-monitored properties can be targets on the world wide web. Keep your eyes and ears open. Watermark property photos. Keep an eye out for your fellow investors, too. If you see a listing at a ridiculously low price, it’s a red flag. Combined with a lack of photos, it’s even more suspicious.

Sometimes it takes a matter of minutes to find a property owner through records and drop them a line about a suspicious ad. Maybe they tell you that the ad is real and they are desperate to get it rented. That sounds like an opportunity for savvy investors to me, so you never know where trying to help out fellow landlords may lead to a chance to grow your business.

When Your Property is Most Vulnerable

Financially, properties are at their worst when vacant, thanks to loss in positive cash flow until that vacancy is filled. This is also the most crucial time to protect your property from criminals. Vacant properties are prime targets for scams—it doesn’t take long to break in, change the locks, and start charging. Because routine property inspections tend to be spread out, we make the mistake of continuing that pattern when the property is vacant.

During a vacancy, real estate investors must be extra vigilant.

Protecting a Vacant Rental Property

  • Use security systems. Know when someone has broken in or if anyone accesses your property by maintaining active security systems with entry sensors.
  • Make it appear lived in. Many security and smart home systems allow owners to remotely control lights, locks, and thermostats. Use lights to give the illusion of activity and inhabitants. Even with a “for rent” sign outside, good lighting indoor and out can be a deterrent to criminals looking to break in.
  • Make routine inspections a habit. If not you, ensure that someone is checking in every week, whether it’s a friend or your property manager.
  • Rent it out! Easier said than done, we know. Having an aggressive and effective marketing plan, as well as a competitively pricing your rental property, will help reduce vacancies and minimize the chance of your property being targeted.

What About Squatters?

Squatters sometimes overlap with the whole “fake landlord” scam, but other times, they don’t. Squatters can cause big trouble, not just for your properties, but potentially for properties you’re looking to purchase. These people don’t own and don’t rent the property, but live in it as if they do. For real estate investors, squatters may be previously evicted tenants (which is why we always need to change our locks!). Sometimes they’re just opportunists who prey on foreclosed, abandoned or temporarily vacant properties.

And it’s not always as easy as solving the problem with a quick call to the cops when you come across a squatter: There’s a thing called adverse possession.

What is Adverse Possession?

Essentially, if a squatter lays claim and treats the property as his own without any opposition from the true owner, they may be able to gain legal title to a property under certain conditions. This usually takes a few years, so owners don’t usually have to worry about truly losing their properties.

Related: 3 Fundamental Tips for Protecting Yourself Legally as a Real Estate Investor

Some squatters, however, are under the delusion that they own the property. It doesn’t just happen on derelict properties, either. This squatter changed the locks on a new homeowner and turned on the electricity in his name, effectively barring the property from the true owner. Squatters can also target properties that are left vacant during vacations just as they would during a true vacancy.

The best way to prevent squatters is one and the same as preventing scammers: diligence in property management and immediate action in the face of an issue.

As real estate investors, we need to look out for one another and our prospective tenants by being aware and well-prepared to handle rental scams that may come our way. Even if you think it will never happen to you, embrace the possibility and plan accordingly.

Has your property ever fallen prey to a squatter or scammer?

Share how you dealt with it in the comments.

About Author

Chris Clothier

In 2005, Chris Clothier (G+) began working with passive real estate investors and has since helped more than 1,100 investors purchase over 3,400 investment properties in Memphis, Dallas and Houston through the Memphis Invest family of companies.


  1. Wayne Mack

    Chris, you definitely opened my eyes to a new, scary possibility. I had never thought of something like this happening in the past but thanks!
    Now I know of another possibility to keep in the back of my mind when I get my first rental

    Great article

  2. Elizabeth Faircloth

    Thanks Chris for the article! Just today we found a listing showing one of our rentals being listed by a scam artist $200 less than our real listing on Craigslist. This is not the first time this has happened. Do you know any clever ways to avoid this from happening on craigslist? Thanks again!

    • Chris Clothier

      Hi Elizabeth,

      We have our agents keep track daily of our ads on Craigslist and we run searches for our addresses. It is simply staying vigilant and keeping an eye our for things that look out of order. Run Google searches on your addresses and watch the listings that come up. If you se something out of place – report it. I am sure you are already doing that! Sorry I don’t have any better tips.

      All the best – Chris

    • Kara C.

      I do what Chris Clothier mentioned, but I also watermark all my listing photos with my phone number before posting them anywhere online. Yes, someone could still copy them for a fake listing, but they are less likely to do so when there is contact information on the photo that won’t match theirs.

  3. Kathryn Daniel

    This happened to us – we had posted our house for rent on Craigslist and found an almost identical ad (they stole our photos and all) a few days later with a reduced rental rate but different contact info. A prospective tenant that we had been working with from a legitimate ad contacted me to make me aware of this and said it sounded fishy so she brought it to my attention, thankfully! My husband responded to it as if he were an interested tenant and it was so obvious that it was a scam. We flagged the ad and it was removed. Come to think of it, it’s so easy to pretend to be a property owner here and scam people out of a ton of money. I’m so glad ours was caught quickly and hope that no one was taken advantage of.

    Thinking that none of these things can happen to you is unrealistic and it’s important that we do everything we can to protect ourselves (and our prospective tenants) from falling victim to them. There are bad people everywhere, unfortunately. Thank you for posting this! Great info.

  4. Jordan DeLozier

    This happened to one of our rentals on Craigslist and another site (possibly Zillow, but I can’t remember). The real listing was for $1,200 rent but the multiple duplicates were anywhere from $600-800 per month. While we were working on the house we had at least 4 people show up wanting to rent it immediately. I had no idea what was going on so I referred them all to our property manager. Thankfully none of the people that showed up sent money to the scammers.

  5. David White

    Nice article. I once had neighbors living on the corner house in my court. The house was vacant for years. But I didn’t think much of it. Come to find out the people inside the house never owned or paid rent for it. They did however put electricity in their names. They were caught and put out. Now someone has legally purchased the house and is doing a fix and flip on it.

  6. Kuntay Talay

    Yes, this is a very nice article. Thanks Chris.

    I would say I am dealing with a potential squatter in a vacant property I am interested in purchasing. Sounds like the seller’s agent notified the seller about this issue. However, seller hasn’t done anything about it.. I wonder why??

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