Scams are a common problem in many different areas of real estate and short-term rentals are no exception. In this article, we cover one of the most common scams involving short-term rentals. By increasing your awareness of the existence of these scams and helping you be able to spot the telltale signs, our hope is that we’ll be able to prevent scammers from taking your money!
Scams are a persistent and prevalent problem in many different areas of real estate and short-term rentals are no exception.
Scams originate from people who lie, cheat, and steal to get what they want. They target large numbers of people in the hopes that they catch a few unsuspecting and unknowing victims in their net.
Your best defense against scams is to increase your awareness that they exist and be able to spot the telltale signs. However, sometimes the scams are so sophisticated that it’s difficult to distinguish between what is real and what is a scam.
Being part of a community of real estate investors can help you avoid being scammed because information about scams can be shared efficiently and effectively. In our communities, Semi-Retired Physicians and Semi-Retired Professionals, we regularly share information about scams and have even had victims of scams be brave enough to share their experience with the hopes that others will avoid the same fate.
The highest risk time for being scammed is when you are a new owner. You are so busy learning everything you can know about real estate investing, that scams just aren’t on your radar. You also haven’t experienced enough situations to really know about the different types of traps that are set by scammers.
With short-term rentals, in addition to the usual wire fraud that is common in all real estate transactions, one of the most common scams is a booking inquiry scam.
What is a booking inquiry scam?
In this scam, you get an inquiry from the potential guest about booking a stay. However, unlike other inquiries where a guest is asking about a particular feature of your property like, “is the pool heated?” or “how fast is your WiFi?” it’s a request centered around payment.
The gist of it is, the scammer overpays you for the stay by sending you a counterfeit check or money order for more than the amount of the stay, and then asks you to refund them for the overpayment.
The thing you have to be aware of is that the reasons they give you for sending you a check may sound totally legitimate. They might say they are a victim of identity theft so they don’t have a credit card or their employer is paying for the stay. The key to avoiding this trap is to simply be aware that if you go outside of the platform for payment, there might be a risk.
How is this different from direct bookings?
Now it is important to point out that this is completely different than getting a direct booking.
A direct booking is when you set up a website for your short-term rental and get customers to book directly with you instead of going through the various booking websites like Airbnb and VRBO.
There is nothing scammy about direct bookings and in fact, you can actually save a considerable amount on booking fees by setting up a direct booking website. If you want to read more about the benefits of setting up a direct booking website, CLICK HERE.
Real-life examples of short term rental scams
In order for you to be able to spot these scams, I have included a few real-life examples that our community has received over the past year. Note that scammers will likely adapt over time as their success rate drops as more owners become familiar with these scams.
“Thanks for your response, I have discuss with my wife and we both interested in your property. I will be coming with my wife and no pet for a vacation. My company will be taking care of the vacation so I can only make the payment by sending you a company or certified check for the payment, kindly get back to me with the mailing information and total quote for the night via text. on xxx-xxx-xxxx and we can further discuss this and also the pdf attached is my contact information.”
“Hello , we would love to book directly from you with the reservation by sending a company or certified check for the payment. Kindly provide your mailing address and the total quotes for the night requested via text or email.”
“Hello, I am glad those dates are available. My name is Charles, I will be coming for the vacation with my wife and our 2 beautiful teenage daughters age 15 and 17. I can only handle the payment by sending a check for it, feel free to leave me a message to xxx and xxx and lastly xxxx to discuss further on this. Also my contact information (email address and phone number) is attached as pdf file to this email, It will hasten our communication.
When you read these, you’ve probably already spotted some warning signs. In case you didn’t, let’s cover them next.
Telltale signs
As you can see from the above examples, there are many telltale signs that should alert you to the possibility that these are scams.
Many of the inquiries contain grammatical errors. The first example above has several errors: “I have discuss with my wife” or “we both interested in your property.”
Whenever you see grammatical errors like this, it doesn’t mean it’s always a scam, however, it should definitely alert you to the possibility of a scam. With that said, you can see the other two inquiries don’t have any glaring grammatical errors.
Another telltale sign is when the inquiry is overly formal. For example, “kindly get back to me” or “it will hasten our communication” just isn’t how most of us communicate in the U.S.
One last sign is trying to get you to communicate off of the platform. So whenever they give you their email or phone number, you should be cautious. The safest thing to do is to keep all communications on the platform.
What is Airbnb and VRBO doing about short term rental scams?
Both platforms have mechanisms for owners to report or flag scams. They also have links to helpful articles for helping owners identify common scams.
However, what is less clear is what they’re doing to prevent these messages from being sent in the first place.
In general, it seems both Airbnb and VRBO’s approach to scammers is to push the responsibility of identifying and reporting these scams to the owners.
Because of the laissez-faire approach to scams, this increases the importance even more of increasing our collective awareness of scams and taking personal responsibility for preventing them from ever occurring.
Have we missed any common scams? Let us know in the comments so we can prevent scammers from taking your money!
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