Tenants Beware! Scams and Foreclosures

03/05/2012

As a tenant it is important to do your homework when searching for a new place. You need to spend some time researching the Landlord to discover if he or she is the actual owner of the property you are about to rent. Here are a couple scenarios to watch out for.

Craigslist Scam

A popular scam here is that a 3rd party (probably in Nigeria) steals the online data for a locally listed house for sale. In most cases, the home is vacant. The scammer posts a “for rent” ad, with a picture of the house, on craigslist. When you inquire, you get some story about how they are out of the country for a few years and just want someone nice and clean to take care of their beloved homestead.  All you have to do is wire them $500 and they will send you the keys.  Tip if you can’t make the deal face to face with the owner or a reputable agent, it’s probably a scam. How can you check to see who the owner is? Here is a link to the St. Clair County Public Records.

http://www.stclaircounty.org/Offices/equalization/search.aspx

You can also call the city or township to ask questions.

 

Looming Foreclosure

Another big issue is when an owner is renting his house as a result of financial desperation. The owner or landlord maybe late on mortgage payments or they may even have stopped paying all together, this means the land lord will be pocketing your rent. The issue here is that at some point the in the near future the bank will be foreclosing and evicting you from the house. You will be out any prepaid rent and good luck getting your security deposit back without litigation.  Times are tough for a lot of owners and landlords with good intentions. Some of these hardship cases can make good short term rental situations but only if the tenants are fully aware of what they are getting themselves into.  So it is important to ask the landlord when you are looking, “Do you own this house out right or do you have a mortgage?” If there is a mortgage, ask if the owner is current on payments. You also might ask if they have reserve funds for maintenance issues that will arise. Being a land lord can be costly. Owners need to have funds to fix roofs, snake out drain lines, keep the furnace running, etc. After a landlord pays mortgage payments, taxes and insurance there might not be much left to cover repairs. If the owner’s story sounds shaky ask for some references.

 

By: Marc Reno, Associate Broker

mreno@bauerreno.com

810.966.1200

Bauer-Reno and Associates Real Estate LLC