Real Estate is one of the safest investments but fraudsters have entered into a rental scam that hits close to home. Last month in Guelph up to 16 different listings on Kijiji and other sites had rental units available that were not being rented. A local realtor blew the whistle on the scam and the police can not do much about it since fraud had not occurred even though they are trying to scam you. The website PROP2Go has over 99% legitimate listings but there were several that were found to be fraudulent.
The basic scam was to lure a potential renter to provide their passport information and $500.00 upfront to secure the rental. Asking for a deposit before seeing a property should be a red flag but in some markets in North America this could seem plausible due to the fact some markets are experiencing rental shortages and some people might be willing to put up money to secure a good rental. In Guelph that is not the case and potential renters called the listing agent about the property which exposed the obvious scam. Fraudsters can keep putting up these ads and no one can really do much about it unless they commit fraud and in that case the police can do an investigation but it will not bear fruit since these fraudsters are not even in this country.
The moral of the story is that scam artists are starting to target this area and you should be aware of it. The old saying if it is too good to be true than it’s not true. If you are looking at all these secondary websites looking for a real estate deal you may get burned and while the market is strong you will see even more scammers once that market settles since people will be in a tight position and they will try to unload their property that will come with a huge buyer beware reminder. These scams along with most rent–to–own scenarios are always biting people in the ass and you should not feel sorry for them since they opted out on using a real estate professional.
I am not trying to scare people into using a real estate agent but the truth of the matter is a real agent can smell a bad deal a mile away and if by chance they accidentally get duped by these scammers you can at least have a way to get your money back since all agents are insured for these cases. A good agent can arrange a proper rent–to–own scenario that will benefit both parties and when it comes to rentals they can also negotiate a better, safer deal for you. If you honestly believe that you can do what a real estate agent can do then take your chances but do not cry foul if you get scammed and have no recourse. Use an agent in any type of real estate transaction and be protected by not only their knowledge of the market but their broker's knowledge and the bank roll of their insurance company in case anything goes sideways. V
Darrin DeRoches is a local real estate and mortgage broker. He can be reached to answer questions, comments or stories about real estate experiences through this weekly column at email@example.com