Monday, August 6, 2012
How to Avoid a Rent to Own Scam
Beware of a rent to own scam. Such scams are growing in popularity and they are designed to steal your money.
The concept of rent to own is a great idea, especially if you're trying to be a homeowner again after foreclosure. You would move into a home for an agreed upon monthly rental amount for a specific lease period. At the end of the lease, you have the option of buying the home with the monthly rent being considered a down payment. While many rent to own ventures are legitimate, there are some that can be deemed outright scams. In order to avoid being taken over by such a rent to own scam, it is well advised to be on the lookout for these scams.
The way a rent to own scam works is that the “landlord” will research listings for foreclosed homes that have been vacated for many months or even years. Since the home has not sold for a long time, they assume (often rightly) that it won’t be sold be many more months. Such homes become neglected and nearly forgotten. The rent to own scam players will literally break into the home, change the locks, and then place an advertisement online for renting to own the property. Anyone that takes advantage of the “offer” moves into a home and pays rent to someone that does not own it. In time, the renter is discovered and evicted. Obviously, the rent to own agreement is not honored.
To avoid falling into such a trap, it is best to look for a few common red flags identifying a rent to own scam.
Many of these advertisements are merely cut and pastes of other ads. Run a search of the advertising copy online to see if duplicate content turns up. If it does then you may have a scam on your hands.
Very cheap rental rates are not always a good deal. Frequently, they are signs of a possible rent to own scam. Be wary of rental prices that just seem unrealistically low.
Does the ad list a landline number? Commonly, the phone number listed in the ad is a cell phone. Worse yet, the cell phone might be a “pay as you go phone” that was is being operated under an assumed name. Unless you can confirm a landline number, you have to take the ad somewhat suspiciously. In some instances, communications is solely through email which is among the reddest of rent to own scam red flags imaginable.
If you are shown the home and it looks as if the locks on the doors have been tampered with or the condition of the home looks if it has not been lived in or abandoned, it may be a foreclosure and not a home that someone is currently living in. Once again, a rent to own scam often involves foreclosed property.
There are even advance payment rent to own scam ventures that are launched. Such scams revolve around asking for a down payment to be wired as a deposit on first month’s rent. Such wire requests are made by people that are out of the country and have never even set foot in the home. Worse yet, the would be renter has never seen the home. He or she is only going on photos provided to them via the internet. Really, paying anyone in this manner and under such dubious circumstances truly is asking for being scammed.
Performing a little due diligence is highly advised as well. If you are given the name of the rental service, you should look it up on the Better Business Bureau’s website. This way, you can determine if any complaints have been registered about the company in the past. Checking with the National Association of Realtors is a wise strategy since it is an excellent resource to determine background info on reputable companies while also being able to avoid a rent to own scam.
If you really want to avoid a rent to own scam, you should search for rent to own homes on RealtyStore.com. This site is one of the top rent to own directories and its listings are legitimate. Anyone even remotely considering renting to own should visit the site prior to making any decisions on a lease option agreement.