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Having a difficult time finding a great apartment or rental house on Craigslist?

I feel your pain because I’ve been there too. During a booming housing market it can be almost impossible to find a decent apartment at an affordable price.

The worst part is that many of the the Craigslist rental ads are posted by scammers trying to get some of your hard-earned money.


In this article we break down the most common scams and how to avoid getting ripped off in the process.

What is a Rental Scam?

Before we continue, I think it is important to define what we mean when we say rental scam. There’s a big difference between a scam and just a bad deal.

For instance, in big cities where there is high demand for apartments, prices can seem outrageous. Just because a landlord is charging an arm and a leg for rent each month, doesn’t mean it’s a scam.

That’s just the reality of the world we live in. The higher the demand for apartments in your area, the more you should expect to pay for rent.

So what exactly is a rental scam?

We consider a Craigslist rental listing to be a scam if it meets these two criteria:

  • The ad is for a property that is not available or not owned by the advertiser
  • And, the advertiser collects fees upfront or through affiliate marketing methods

Credit Report Scam

One of the most common Craigslist rental scams you’ll encounter involves paying for a credit report.

Although most landlords will run your credit report when you fill out a rental application, the cost is typically covered by your application fee or by the landlord themselves.

However, scammers will attempt to get you to pay for your credit report even before you get a chance to see the property.

Here’s how it usually works:

The scammer will post an ad for an apartment – either a clone of another ad or a new ad for an imaginary property. Then, when you email them requesting information, they will ask you to get a new copy of your credit report and forward it to them.

But, here’s the catch: they will require you to get your credit report from a specific website and will include a link in the email they send you. This is an affiliate link and they can make anywhere from $10 to $40 when you request a credit report from the company they recommend.

On the surface this scam rarely looks suspicious – but that’s why this type of ad is so popular. It requires almost no work from the scammer.

They post fake ads daily, in cities around the country, and wait for eager renters to send them their credit reports. Then, they sit back and wait for the referral checks to start rolling in.

Plus, if they know what they are doing, it is almost impossible to tell a legit ad from a fake ad.

When you do the math it is easy to see why scammers love this trick.

Let’s say the scammer posts one new ad per day and receives an average of 20 applications per post.

These scammers can earn up to a $40 commission for every credit report signup they refer through their affiliate link. After we add up the numbers, that means the scammers could be earning $24,000 every month without leaving their couch!

1 new Craigslist ad per day x 20 applications per post x 30 days = 600 applications per month

600 applications x $40 credit report affiliate commission = $24,000 per month

Now you can see why this scam is so widespread on Craigslist – it’s very lucrative!

Interested in legitimate ways to make money from home? Bookmark these articles:

Out-of-Town Landlord Scam

The “Out-of-Town Landlord” scam is also quite common, but is a little bit easier to spot.

In fact, one of my friends that owns a rental property has had this exact thing happen to her.

Here’s how it works. Lazy scammers will clone or copy legitimate rental ads but reduce the price and change the contact information.

From the outside there is no way to tell which ad is the original and which is the fake.

When you reply to the ad via Craigslist, you have no idea whether you are emailing the real owner or the scammer. Then, the scammer will send you a long winded story about how they are out of town and are looking for a responsible renter to take care of their property.

Here’s the catch: in order to take advantage of the discounted rent offer, they require a deposit and first month’s rent via wire transfer.

If you weren’t suspicious by the reduced rent price, or strange backstory, the words “wire transfer” or “Western Union” should tip you off that this is a scam.

Before you put down a deposit on an apartment, make sure you tour the property and talk to the owner or property manager directly.

When looking for an apartment to rent, take your time and ask smart questions. A little due diligence will help you avoid 90% of Craigslist rental scams.

Rent to Own Scams

Lately I’ve been receiving many questions from our readers that want to buy a house, about rent-to-own options.

As it turns out, these companies are often associated with Craigslist rental scams.

Most of the rent-to-own offers you will find on Craigslist are actually posted by lead generation companies. They post photos of houses that were previously available as rent-to-own and ask you to fill out an application. After they have your contact information, they attempt to sell it to mortgage companies on a per lead basis.

You may also encounter companies that sell access to their database of pre-foreclosure or rent-to-own homes. Usually they charge an upfront fee plus an additional $20 to $40 per month.

Many of our readers have told me horror stories about these database companies. After you pay your fee, you get access to a database that is completely worthless or inaccurate.

While there are a few legitimate companies that offer rent-to-own financing, I would be very careful who you give your contact information or credit card number to.

If you are interested in a review of the companies I trust, let me know in the comments below and I will be happy to share with you.

Conclusion

These were just a few of the most common Craigslist rental scams I’ve encountered. Unfortunately, there are probably dozens of others I’ve never heard of.

My hope is that you will use this information to protect yourself and your family from potential scammers on Craigslist.

While not all ads on Craigslist are scams, you should be very suspicious of ads that seem too good to be true or ask for upfront payment.

Always tour the house or apartment before putting down a deposit and verify you are dealing with the owner or approved property manager.

It can take some amateur detective work to find this information out, but it is always worth the effort.

If you have any experience with Craigslist rental scams please feel free to share your story in the comments below.

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