Phoenix No. 4 among cities with most reported rental scams

Real Estate | 24 Jul |

Most people think of summer as a time for vacation, but it’s also a time when people are on the move more permanently. The kids are out of school, the weather’s better and more apartments and homes are on the market, so it’s convenient and attractive to relocate. It’s also a time to beware of rental scams because so many people move.

COVID already caused many people to make major moves last year, with workers leaving big cities for more rural areas during the pandemic’s first six months thanks to the added flexibility of remote work. The move toward warmer weather isn’t new or unexpected, but it accelerated during the pandemic. Cities like AtlantaAustinCharlotteDallas and Houston saw big gains.


READ ALSO: 1 in 3 renters looking to upsize: Here’s what it will cost them


Combine the effects of COVID with the onset of summer, when the weather makes people restless, and work tends to be a little more flexible — at least in some professions — and the rental market was bound to heat up. But one group that doesn’t take a summer vacation is scammers, who are eager to take advantage of renters making a move.

Methodology

We used the Better Business Bureau scam tracker and looked at all rental scams reported in the United States from February 13, 2015, through May 31, 2021, to find out when and where scams commonly occurred.

We removed any scams with more than $10,000 reported lost (17 data points total), and reports with invalid ZIP codes (seven data points total), leaving us with 1,899 reported rental scams to evaluate.

Cities with the most rental scams reported

cities with the most rental scams

Rental scams were reported in 974 cities around the United States. These are the cities with the most total scams reported. Three of the 10 cities with the most scams were in California, and two of the top 10 were in the New York City metropolitan area.

Interestingly, while people were moving out of New York City last year, there was a 48 percent increase in scams reported from 2019 to 2020.

The worst time for rental scam losses is the summer

While January has the highest number of scams reported, on average, the biggest losses occurred in the summer months. This aligns with when most people are moving. May was the month when the most money was lost, at a median of $19,991.15 that month from 2016 to 2020. June saw the second-highest losses and August saw the third.

However, not all scams resulted in large monetary losses. In fact, of the 1,899 scams reported, 59.4 percent reported no losses at all. The median loss from rental scams, excluding those where nothing was lost, was $640.

January has the most scams reported, on average

It’s not surprising that the holiday months saw the fewest scams reported. November had the least number of scams reported, on average, followed by December. However, it is interesting that January saw the highest number of scams reported, on average.

States with the most rental scams per capita

states with the most rental scams

These rankings are based on the total number of scams reported from 2015 to May 2021 divided by the population of each state. States with 10 or fewer scams weren’t included among the top cities, since the data wasn’t significant.

1. Idaho

Idaho had the most rental scams per capita, which isn’t surprising given the influx of residents over the past few years. In 2020, more people moved to Idaho, percentage-wise, than any other state, with a 70 percent inward migration rate compared to just 30 percent outbound.

That continued a trend that stretched back over at least the past decade of more new residents than departing ones. This trend has accelerated since 2015 and especially since 2018: Inbound rates have hovered around 70 percent for each of the past three years.

The increase in demand has helped fuel an increase in rental costs in the state. In fact, the average rent for a 2-bedroom apartment has risen 57.9 percent year-over-year, from $1,196 to $1,889. That’s a bigger jump than in any other state.

2. Hawaii

While Hawaii may seem like paradise, it saw the second-highest number of rental scams per capita over the past five years. However, the population has been slowly but consistently decreasing each of the past four years since peaking in 2016, according to U.S. Census data. The total number of rental scams reported has also fallen over the past few years, and if trends continue Hawaii isn’t likely to be high on this list for long.

3. California

California is by far the most populous U.S. state., with more than 39 million residents as of 2020. So it’s no surprise that the Golden State is fertile ground for scammers. California had nearly four times as many reported scams as any other state.

4. Colorado

Rental scams reported in Colorado were higher in 2020 than any other year. Migration to Colorado may have played a role as it was the eighth-most moved-to state last year. Colorado is overflowing with outdoor activities, making it the perfect destination for people who are tired of a more metropolitan lifestyle.

5. Oregon

Oregon has consistently reported rental scams year-over-year. And Oregon’s population has been increasing over the past few years. It surpassed 4 million for the first time in 2015 and has grown each year since, topping 4.2 million in 2020. And a lot of transplants are from California: As of 2018, nearly 1 in 5 Oregon residents were born in the Golden State.

Signs of rental scams and how to avoid them

It’s important to learn to recognize the warning signs for rental scams. As with anything else, if something feels suspicious or too good to be true, it probably is. That’s why it’s important to read any rental agreement carefully before you sign it.

If you go to see a vacant property, make sure the person showing it has access to every part of it and can answer specific questions. Some scammers “show” homes to collect a deposit from you, even though they have no legal authority to rent them. They’ll take the money and run, and you’ll be out of luck — and cash.

Avoid doing the following:

• Signing a lease without seeing the property. Virtual tours may be an option.

• Wiring money or sending cash.

• Paying excessive fees (more than about $75) for a background check.

Make sure to:

• Understand market rate. You should be concerned if the rental cost is too low.

• Research the owner or property management company. Look for a digital footprint and online reviews.

• Review the address on Google maps to confirm photos match the imagery on the listing.

• Be wary of duplicate listings. Some scammers copy listings and change the contact info.

You should know what to look for in a scam and make sure to use a reputable website for apartment hunting, but be on the lookout even more so at the times and places they’re likely to occur. By knowing the months when scams are most frequent, and the states and cities where they’re most prevalent, you can prepare yourself to take the action you need to avoid them.

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