As Austin’s housing market booms, rental scammers are on the prowl

Lauren Wisniewski was scrambling to help her friend find a place to live in March when she came across a listing on the online classified site that seemed like the perfect fit.

The Craigslist poster claimed to be a real estate agent who connects prospective renters with tenants who are looking to sublet their apartments. He said he had a one-bedroom apartment in the Domain in North Austin that was available for an affordable price.

Wisniewski’s friend has a disability, lives on a fixed income and receives federal housing assistance. She was not able to renew her current lease, and there was a two-month gap before she could get into a new permanent housing situation.

Wisniewski, who also has a disability, said she emailed back and forth with the poster and spoke to him over the phone. He sent her photos of a California driver's license, a state of California real estate broker's license and a certified property manager title all under the same name, and she looked up the license numbers online.

More: Travis County headed for record number of property value protests this year

Wisniewski and her friend crowdfunded $1,900 for two months of rent and sent the money. But when they showed up at the apartment complex on move-in day, the staff there had no idea who they were, and there was no apartment waiting. The money, however, was already gone.

“My friend is homeless now. Thankfully right now she's staying in a guest room at a friend's house,” Wisniewski said. “If I had been in a clear state of mind, if I had thought to actually call the apartment and double-check and make sure, then this could have been prevented. But because we were both running on desperation and panic, things slipped through the cracks.”

Scammers preying on renters online in Austin is nothing new, but local real estate agents say the situation seems to be getting worse as Austin’s housing market booms. Often scammers take real listings of properties for sale or rent and repost them with under-market rent, then try to get people to send them money for the property. Realtors say one way to avoid scams is to search for the address online to verify whether it is for rent or sale elsewhere.

'It's very common'

Debbie Barrera, an agent at Realty Austin, wrote a blog post about how to spot and avoid rental scams back in 2011. She said it’s still an issue she and her co-workers are dealing with today.

“It’s very common. We have a Facebook group where we as agents talk to each other, and we put on there, ‘Hey, can everyone please flag this ad on Craigslist? It's fake.’ We have 650 agents in our office. So when Craigslist is getting 400 flags on an ad, they're going to take it down, but it's finding that ad that actually is the hard part.”

More: Median home price soars past $520,000 in Austin area's tight housing market

Barrera said she and many other agents have made it common practice to set up Google alerts for the properties they are selling or renting, so that they get emails when the property is mentioned online and can more easily spot and report fake listings.

Barrera said that rental ads posted with lots of typos can be a red flag to avoid scams. She also advised renters to be skeptical of people asking for money via a wire transfer.

Another red flag “is saying that they're out of town,” she said. “They’ll say just do a drive-by — drive by the house and peek through the windows. That's usually a bad sign because that means they don't have keys to the house. They don't have access to the house, and they’re probably not the owner.”

Barrera said that sometimes scammers look up the property owner's name on the tax records and make a fake email address with it. Other times scammers don’t take this step, so one way renters in Travis County can verify whether they are talking to the right person is to look up the property owner's name on the Travis Central Appraisal District’s website and see if it matches the person they are talking to.

Sam Sawyer, CEO of Pinnacle Realty Advisors, said he thinks scams have become more prevalent as Austin’s housing market has gotten more expensive.

“I remember this happening to me a few times (when I was an agent), but it's happened a lot more in the last year,” he said. “Everyone's so frantic about finding something to rent. I think (scammers) found a lot of success with this in the last year.”

More: Mixed-use project with 625 apartments, grocery, planned for East Fifth Street in Austin

Higher rents a factor

Rents are rising nationwide, and Austin is no exception. A report analyzing March data from showed that in more than 80 of the nation's 100 largest cities, rents have gone up more than 19% on average for one- and two-bedroom apartments in the past year. In Austin, the same report showed rent for one-bedroom apartments had gone up 46.7% since March 2021. Another study by of April rental data showed Austin with a slightly lower increase of 32.2% for one-bedrooms compared with April of last year.

Jason Meza, a senior regional director of the Better Business Bureau office that serves more than 100 Texas counties, said scams are becoming more prevalent in Texas and nationwide as housing grows more expensive.

“It is still a pretty hot housing market. There's a lot of buyers turning to renting, and the scammers do know this, and they cash only eager renters who kind of rush into an agreement, and we just did a recent study here at BBB that found that fraud is still widespread,” he said. “It's scarcity at this point, and the fear of missing out (on housing) is still a real concern.”

Meza said there is no centralized database of housing scams, and rental scams are probably underreported. However, according to a recent national survey by Apartment List, 43% of online consumers in the United States encountered a scam attempt while they searched for rental housing in 2021. About 5 million people lost money to a rental scam in fiscal year 2021, an average of $800 to $1,200, according to the same survey.

Job Hammond, who sits on the Austin Board of Realtors board of directors, said that cities like Austin, where most people rent their home, are more likely to attract these kinds of online rental scams. Austin is on the list of American cities, which also includes New York, Houston and Los Angeles, where more than half of the population are renters. The national average is closer to 37%, according to the 2020 census.

More: Austin can expect to add 22,000 tech jobs in next five years, report estimates

Protecting yourself

Sawyer said his advice, especially for people moving to Austin from out of town, would be to avoid sites such as Craigslist in favor of sites that have more protocols to prevent or remove false listings. Craigslist representatives did not respond to a request for comment.

Sawyer also suggested out-of-towners familiarize themselves with Austin’s market rates because one sign of a scam is unusually low rent.

“If it's a property that seems way too good to be true, or if the pricing's way off, then it's probably fake,” Sawyer said. “The consumer could also message someone on Craigslist and say, ‘Hey, can I speak with your managing broker to ask a few verification questions?’ They probably won't get a response from the scammer.”

A federal government resource guide for people who have been scammed suggests reporting the incident to local law enforcement and the relevant state agency. Texans looking for consumer protection help should turn to the state attorney general’s office, according to the site. It also recommends reporting scams to the FBI Internet Crime Complaint Center.

An Austin Police Department spokesperson said the department receives calls about this kind of scam on a weekly basis, and that the number of calls about rental scams has stayed fairly consistent in recent years. The spokesperson said that the department does not usually investigate such scams and that the money is not usually returned.

According to the federal resource guide, these are possible signs of a scam:

  • The advertised property is much cheaper than similar properties in the area.

  • The person offering to rent the property asks you to sign a lease before you see the property.

  • The person offering to rent the property claims to be out of town or too busy to show you the home or uses high-pressure sales tactics to rush you into renting it.

The guide also advises renters to search for the property's owner, real estate management company and listing online to see if the same ad is listed under a different name, which could point to a scam. Renters should also avoid paying money before signing a lease, renting a property they have never seen in person, or giving personal information such as a Social Security number to a property owner without verifying the person's identity.

Meza said that people who have been scammed can report it to the Better Business Bureau to help with tracking the trend. The Postal Inspection Service is another place to report rental scams. For people who were scammed while moving between states, the Federal Trade Commission is an option.

Wisniewski said that after she found her friend’s apartment rental was a scam she contacted the Austin Police Department, the FBI and the bank she used to transfer the money. She said she has not heard back from anyone.

She said the frantic nature of house hunting in Austin’s real estate market made it hard to take a step back and assess the viability of the offer.

“If I had been able to work on a longer time scale, then I could have done more due diligence. I could have actually gone and seen the place. ... I could have called them to double check, I could have had more time to just find a place and not had to turn to Craigslist,” she said.

“I feel like I failed my friend. I gave her all of this hope. I was so happy that I found a place that, in addition to just her having a place to stay, it was a place that was in a nice neighborhood. She's moving from North Lamar. I wanted to find her something nice. She needed something nice. And it was just all gone.”

Editor's note: This story has been amended to correct the title of Job Hammond.

This article originally appeared on Austin American-Statesman: Real estate agents warn renters of increased housing scams online