With better weather and more homes on the market, summer is peak moving season for most homeowners and renters. But, because so many do move during summer months, it’s also a time of year when renters face the greatest financial losses due to rental scams, according to a new report from Apartment Guide.
Financial losses from scams
By analyzing rental scams reported in the Better Business Bureau scam tracker between February 13, 2015 and May 31, 2021, Apartment Guide found that during the month of May, the most money was lost by renters due to scams, at a median of $19,991.15. The months of June and August saw the second and third-highest losses, respectively.
However, a fair portion of scams didn’t end in unhappy renters also losing a chunk of cash — out of 1,899 scams reported by Better Business Bureau, nearly 60 percent suffered no financial loss. Meanwhile, the median loss (excluding those cases where nothing was lost) was $640.
Credit: Apartment Guide
Despite renters seeing the greatest financial losses during summer months, January was actually the single month with the most renter scams reported. During holiday-heavy months of November and December, however, the fewest number of scams were reported.
Losses by region
Renters in Idaho looking to move may want to be extra cautious, since the state has experienced the most rental scams per capita, on average in the last five years, according to scams reported to the Better Business Bureau. With cities in the state like Boise gaining in popularity in recent years, the uptick in scams isn’t a huge surprise, Apartment Guide noted. In 2020, the state saw a 70 percent inbound migration rate in contrast to a 30 percent outmigration rate.
The remaining top five states with the most scams per capita, in order, include Hawaii, California, Colorado and Oregon.
Since California is the most populous state in the U.S., its status as a hot spot for scammers is to be expected. Colorado and Oregon, meanwhile, have also been growing in population in recent years, which may be one key reason why scammers also target these two states. Hawaii’s population, on the other hand, has steadily been declining over the last four years, according to the Census Bureau, which may be an early indication that its status as a high-rental scam area may not last long.
At the other end of the spectrum, Iowa, Arkansas, South Dakota, Connecticut and Wyoming have seen the fewest number of rental scams in recent years. In 2019 and 2020 alone, no rental scams were reported to the Better Business Bureau in Iowa. But, Apartment Guide noted, the state’s rental market isn’t as competitive as other states, with an overall rental vacancy rate of 4.9 percent in 2020.
In general, these low-scam states — aside from Connecticut, which is the 29th most populous state — have pretty low populations, and therefore, less competitive markets.
At the city-wide level, Los Angeles topped the charts for most rental scams reported.
Credit: Apartment Guide
Three of the top five cities for rental scams are located in California, and two are located in New York. And, even as many people moved out of New York City during 2020, rental scams increased 48 percent in the city between 2019 and 2020.
To avoid scams, Apartment Guide recommends renters be wary of deals that seem too good to be true, avoid signing a lease without seeing the property, avoid wiring money or giving someone cash and paying high fees for a background check.
