Study: When and Where Do the Most Rental Scams Occur?
Most people think of summer as a vacation time, but it’s also a time when people are on the move more permanently. Children are out of school, the weather is better, and there are more apartments and houses on the market, so it is convenient and attractive to move. This is also the time to beware of rental scams because a lot of people are moving.
COVID has already pushed many people to make major changes last year, with workers moving from major cities to more rural areas in the first six months of the pandemic thanks to the added flexibility of remote working. The move towards warmer weather is neither new nor unexpected, but it has accelerated during the pandemic. Cities like Atlanta, Austin, Charlotte, Dallas and Houston have seen big gains.
Combine the effects of COVID with the onset of summer, when the weather makes people restless and work tends to be a bit more flexible – at least in some occupations – and the rental market is expected to heat up. But one group that doesn’t take a summer vacation is the con artists, who are eager to take advantage of tenants who move out.
We used the Better Business Bureau Scam Tracking and reviewed all rental scams reported in the United States from February 13, 2015 to May 31, 2021, to find out when and where scams often occurred.
We removed all scams with over $ 10,000 worth of reported lost dollars (17 data points total) and reports with invalid zip codes (seven data points total), leaving us with 1,899 reported rental scams to evaluate.
Worst time for loss of rental scams is summer
While January has the highest number of reported scams, on average, the largest losses occurred during the summer months. This is when most people are on the move. May was the month in which the most money was lost, with a median of $ 19,91.15 that month from 2016 to 2020. June saw the second highest losses and August the third.
However, not all scams resulted in significant monetary losses. In fact, of the 1,899 scams reported, 59.4% reported no losses. The median loss from rental scams, excluding those where nothing was lost, was $ 640.
January has the most reported scams, on average
It’s no surprise that the vacation months saw the fewest reported scams. On average, November saw the fewest reported scams, followed by December. However, it’s worth noting that January saw the highest number of reported scams, on average.
States with the most rental scams per capita
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 were not included among the top cities because the data was not significant.
Idaho has recorded the highest number of rental scams per capita, which is not surprising given the influx of residents in recent years. In 2020, more people moved to Idaho, by percentage, than in any other state, with a 70% inbound migration rate against only 30 percent outgoing.
This continued a trend that stretched back at least to the past decade, with more new residents than departures. This trend has accelerated since 2015 and especially since 2018: incoming rates have fluctuated around 70% for each of the last three years.
The increase in demand has helped fuel an increase in rental costs in the state. In fact, the average rent for a two-bedroom apartment increased 57.9% year-over-year, from $ 1,196 to $ 1,889. It’s a bigger jump than in any other state.
Although Hawaii may seem like a paradise, it has experienced the second highest number of rental scams per capita in the past five years. However, the population has declined slowly but steadily each of the past four years since the 2016 peak, according to US census data. The total number of reported rental scams has also declined in recent years, and if the trends continue, Hawaii likely won’t be on this list for long.
California is by far the most populous US state, with over 39 million people in 2020, so it’s no surprise that the Golden State is fertile ground for crooks. California has had nearly four times as many reported scams as any other state.
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 full of outdoor activities, making it the perfect destination for those tired of a more metropolitan lifestyle.
Oregon has consistently reported rental scams year over year. And Oregon’s population has grown in recent years. It topped 4 million for the first time in 2015 and has grown every year since, reaching 4.2 million in 2020. And a lot of transplants are coming from California: As of 2018, nearly one in five Oregon residents were born in the Golden State.
States with the fewest rental scams per capita
While some states have witnessed a large number of scams, others were less likely to fall victim to them. The following states have only reported a handful of scams in the past five and a half years.
In 2019 and 2020, no one in Iowa reported rental scams to the Better Business Bureau. The rental market is not as competitive there as in other states. A 2020 survey of rental property owners and managers found the overall vacancy rate to be 4.9%, with 3.5% for single-family homes and 5.4% for apartments.
Few scams have been reported in their natural state over the past five and a half years. Arkansas’ population hasn’t seen much growth, increasing less than 0.5% year-over-year. Last year, Northwest Arkansas even offered a $ 10,000 incentive to relocate to the state for selected candidates. With a low number of rental scams and an affordable cost of living, Arkansas may be worth considering for those who love the great outdoors.
3. South Dakota
South Dakota is the fifth least populous state, with less than 900,000 residents. In addition, the rate for owner-occupied dwellings is 67.8%, which may be why Mount Rushmore State has reported few rental scams.
While Connecticut is the 29th most populous state, with just over 3.5 million people, it is on the list of one of the states with the fewest reported rental scams per capita. Cities like Stamford and Greenwich have easy access to New York via Metro North, but far fewer scams are reported. It’s no surprise that Brooklyn and New York are at the top of the charts for the cities with the most rental scams.
Wyoming has reported few rental scams. The ownership rate is above average at 70.4 percent. Wyoming is also the state with the smallest population, with just over 582,000 residents. Cheyenne and Casper, with approximately 63,000 and 58,000 residents respectively, are the two largest cities.
Cities with the most reported rental scams
Rental scams have been reported in 974 cities across the United States. These are the cities with the highest number of reported scams. Three of the 10 cities with the most scams were in California and two of the top 10 were in the New York metro area.
Interestingly, as people left New York City last year, there was a 48% increase in reported scams from 2019 to 2020.
Signs of rental scams and how to avoid them
It is important to learn to recognize the warning signs of rental scams. As with anything else, if something looks suspicious or too good to be true, it probably is. This is why it is important to read any rental agreement carefully before signing it.
If you are going to see a vacant property, make sure the person viewing it has access to all parts of it and can answer specific questions. Some crooks “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 away, and you won’t have luck – and money.
Avoid doing the following:
- Sign a lease without seeing the property. Virtual tours may be an option.
- Transfer money or send money.
- Pay an excessive fee (over $ 75 or so) for a background check.
Make sure you:
- Understand the market rate. You should be concerned if the rental cost is too low.
- Look for the owner or the property management company. Look for a digital imprint and reviews online.
- Check the address on Google Maps to confirm that the photos match the images in the listing.
- Beware of duplicate ads. Some crooks copy the ads and change contact details.
You need to know what to look for in a scam and make sure you are using a reputable apartment search website, but be even more alert to when and where they are likely to happen. . By knowing the months when scams are most common, as well as the states and cities where they are most prevalent, you can prepare to take the necessary steps to avoid them.