Rental scam warning for South Africans

With many South Africans scrambling to find accommodation, rental scams are becoming increasingly popular, putting many prospective tenants and their wallets at risk.

According to JustMoney.co.za, the growing demand for rental properties and limited availability has made South Africa’s housing market a fertile hunting ground for fraudsters.

Recent data shows just how competitive the rental market has become. According to the Payprop Rental Index Annual Market Report for 2024, Limpopo recorded the strongest rental growth, at 11.1%.

This was followed by South Africa’s semigration hotspot, the Western Cape, which grew by 10.1% in the final quarter of 2024.

The national average rent exceeded R9,000 for the first time in the same quarter. It is now R9,051/month, an increase of R453 year over year since 2023.

The rental market recovery is also evident in decreasing vacancies. According to the TPN Vacancy Survey Report Q3 2024, the national rental vacancy rate dropped to 5.07% in the third quarter of 2024.

This is a decrease from 6.72% in the second quarter. 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 financially, studying in a new city, or gaining independence as young adults.

Others choose to rent rather than purchase property because homeownership can involve many extra complications and costs.

“Prospective tenants are competing for limited rental units in an increasingly pressurised market, and many feel compelled to act quickly,” said Sarah Nicholson, JustMoney.co.za operations manager.

Nicholson explained that prospective tenants often skip vital checks, leaving them vulnerable to costly scams. With scams becoming more sophisticated and harder to spot, these checks are more important than ever.

Scammers typically post fake rental listings on popular platforms such as Facebook groups, Facebook Marketplace, and WhatsApp groups. They frequently use 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.

How to spot a rental scam

Nicholson noted several common rental scams that South Africans should be aware of. In one example, a Cape Town student finds a R4,000-per-month apartment in Observatory on a classifieds site.

The so-called “landlord” claims to be out of town and, therefore, unable to show the apartment but asks for a deposit and one month’s rent in advance. The student pays R8,000 and never hears from the scammer again.

In another case, a man advertises a R2,500-per-month room on a WhatsApp group and instructs interested tenants to pay R1,000 to secure a viewing.

Several people pay the fee, only to discover that the actual property owner does not know the arrangement, Nicholson said.

A third example involves a Limpopo family who books a beachfront flat in Durban for a long weekend after seeing attractive photos online.

They pay the full amount via EFT, but when they arrive, the actual residents of the flat are shocked and unaware of any rental agreement.

Nicholson provided nine warning signs for potential renters.

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

To protect yourself from rental scams, it’s important to follow a few key guidelines, Nicholson advised. First, always deal with professionals such as registered estate agents or property management companies that follow proper procedures.

Additionally, be cautious about engaging with deals found on WhatsApp or informal groups unless you personally know the poster.

Never pay upfront without seeing the property or sending a trusted representative. Verify the ownership by checking that the person you’re dealing with is indeed the owner or a legitimate agent.

Ask for identification, credentials, a copy of the title deed, or a recent municipal account as proof, or consider using a private company to perform an online deeds search.

Take your time, and don’t let scammers pressure you with urgency tactics, Nicholson added. Avoid making cash payments or paying into a registered agent’s trust account.

Speak to current tenants or neighbours to get their insight on the property and landlord. Ensure all agreements are in writing. A legitimate rental should have a signed lease outlining the terms, responsibilities, and contact details.

Lastly, Nicholson said prospective tenants should follow proper procedures. Most landlords and agents will ask for consent to perform a credit check. If they don’t, it could be a red flag.

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