Avoid rental property scams - 8 tips to protect yourself

Growing demand for rental properties – combined with limited availability – has made South Africa’s housing market a fertile hunting ground for fraudsters. Rental scams are on the rise, as prospective tenants scramble for accommodation.

Recent data shows just how competitive the rental market has become.

Rising demand

• Limpopo and the Western Cape have recorded the strongest rental growth, at 11.1% and 10.1% respectively for the fourth quarter of 2024, according to the PayProp Rental Index Annual Market Report for 2024.
• The national average rent exceeded R9,000 for the first time, in the same quarter. The average rent is now R9,051/month, with a year-on-year increase of R453 since 2023.

Limited availability

• The national rental vacancy rate dropped to 5.07% in the third quarter of 2024, down from 6.72% in the second quarter, according to the TPN Vacancy Survey Report Q3 2024.
• The Western Cape has the lowest vacancy rate in the country, at just 1.07% in the third quarter of 2024.

People look for rental properties for various reasons, such as relocating for a new job, a cohabiting relationship break-up, downsizing for financial reasons, studying in a new city, gaining independence as young adults, or simply choosing to rent rather than purchase property.

“Prospective tenants are competing for limited rental units in an increasingly pressurised market, and many feel compelled to act quickly,” says Sarah Nicholson, operations manager of JustMoney.co.za, a platform that helps South Africans make good money choices.

“They often skip vital checks, which leaves them vulnerable to costly scams.”

How rental scams work

Scammers typically post fake rental listings on popular platforms such as Facebook groups and Marketplace, and WhatsApp groups, often using photos taken from legitimate property adverts. They lure people with attractive rental amounts and claim the property is in high demand. Victims are pressured to pay a deposit or viewing fee upfront, only to discover the listing was fake and the scammer has disappeared.

Nicholson provides examples of common rental cons.

• Student scam. A Cape Town student finds a R4,000/month apartment in Observatory on a classifieds site. The "landlord", who claims to be out of town and so cannot show the apartment, asks for a deposit and one month’s rent in advance. The student pays R8,000 and never hears from the scammer again.
• WhatsApp bait. A man advertises a R2,500/month room on a WhatsApp group. Potential tenants are advised to pay R1,000 to secure a viewing. Several people pay, but when they arrive at the address, the surprised property owner has no idea why they are there.
• Holiday rental trick. A Limpopo family books a Durban beachfront flat for a long weekend after seeing beautiful photos online. They pay the full amount via EFT. When they arrive, the actual residents of the flat are shocked.

Rental red flags

Nicholson provides nine warning signs for potential renters.

1. The price seems too good to be true for a popular area.
2. Poor grammar and vague descriptions of the property.
3. Excuses such as “being overseas” when you ask to view the property.
4. Landlords who won’t meet in person and offer video calls only.
5. Requests for money upfront to “secure a viewing” or lock in the rental.
6. Requests for personal information, such as your ID number or banking details, early in the process.
7. Fake lease agreements sent before any property is seen.
8. No references.
9. Pressure tactics - “Other people are interested, so pay now or lose it”.

Tips to protect yourself

1. Deal with professionals. Work with registered estate agents or property management companies that follow correct procedures. Avoid deals on WhatsApp or informal groups unless you know who is posting.
2. Never pay upfront without seeing the property. Always view in person or send a trusted representative.
3. Verify ownership. Check that the person you’re dealing with is the actual owner or agent. Ask for ID and credentials, a copy of the title deed or municipal account as proof of ownership, or pay a private company that searches online for deeds.
4. Don’t rush. Scammers use urgency to pressurise victims. Take your time and check all details.
5. Avoid cash payments. Preferably pay into a registered agent’s trust account.
6. Speak to tenants or neighbours. Ask them about the property and landlord.
7. Get everything in writing. Avoid verbal arrangements. A legitimate rental offer should include a signed lease agreement outlining terms, responsibilities, and contact details.
8. Follow proper procedures. It’s common for landlords and agents to request permission to do a credit check. If they don’t ask for this, you may be dealing with a scammer.

“As rental scams become more sophisticated, it’s vital to stay alert,” concludes Nicholson. “Trust your instincts, preferably deal with a reputable agent, and verify everything before you make a payment.”

Where to report a rental scam

South African Police Service (SAPS). Visit your nearest police station and file a case. Report it as a criminal offence such as fraud or theft, and get a case number.

The online platform where you found the listing. Report a fraudulent listing so the administrator can remove the ad and block the scammer.

The Rental Housing Tribunal. If you've entered into a lease agreement and experience unfair or illegal practices, contact the Tribunal in your province for a free dispute resolution service. Find details under the Department of Human Settlements.

Property Practitioners Regulatory Authority (PPRA). If the scam involves a registered estate agent, report them to the PPRA. See the PPRA website or email complaints@theppra.org.za.

JustMoney.co.za is a trusted voice in the personal finance sector. The JustMoney platform offers personalised insights, numerous articles, and a range of financial solutions and tools, including a free credit score check. Register here.

Sources:

• PayProp Rental Index Annual Market Report for 2024
• TPN Vacancy Survey Report Q3 2024

Caption: Rental scams are on the rise, so stay alert and protect yourself, advises JustMoney.

Issued by:        Meropa Communications

On behalf of:   JustMoney.co.za

Contact:           Judy Bryant judyb@meropa.co.za, cell 083 286 7168