Protecting Renters: Avoiding Junk Fees and Spotting Scams
Apartment shopping can be stressful enough, but in today’s marketplace scammers and crafty custodians can lead to a financial maze with potentially disastrous results. This is why professional rental assistance can be so valuable.
New Rental Reality – Uncovering Hidden Fees
Median national rent prices continue to sit well above pre-pandemic levels, having risen by more than 18.5 percent in three years, and now account for 30 percent of the average American household income.
Hidden 'junk' fees and rental fraud make it difficult to accurately estimate the true cost of an apartment – especially when using different search engines online. These additional fees typically range from $5 to $50, which may seem insignificant, yet can add up with multiple line items to more than tenants budgeted for, as reported by The Wall Street Journal.
What makes the charges hard to contest is their attachment to specific services such as rent processing, trash removal, mail sorting, parking, pets, "January Fees" (an added charge in some states on the first month of the year with no apparent benefit to tenants) and even “convenience” fees to collect tenant’s rent online…which is a convenience for landlords.
Enhancing Rental Transparency
Beyond the obvious financial implications, the lack of transparency associated with these fees can mislead renters into choosing an apartment they believe is affordable, only to discover unexpected costs. Even before the pandemic, over 20 million renter households expressed concerns about housing costs jeopardizing their financial stability, according to a March report by the National Consumer Law Center.
In response, the White House took steps to enhance transparency and several online platforms have agreed to work towards disclosing all fees. Examples of efforts include:
- Zillow.com plans to display a "cost of renting summary" on its active apartment listings, summarizing all additional fees.
- Apartments.com will introduce a calculator to help renters determine the total cost of renting an apartment.
- AffordableHousing.com will ensure owners disclose all refundable and nonrefundable fees upfront in their listings.
These tools aim to make apartment hunting more transparent, allowing individuals to compare options and reduce uncertainties.
Application Fee Awareness
Prospective renters often contact multiple owners or property managers and visit several places during their housing search. Each rental application entails a fee, ranging from $50 to hundreds of dollars. This is supposedly to cover office work and background/credit checks. In a tight rental market, applicants frequently apply to multiple properties, and inaccuracies in tenant screening reports can lead to repeated rejections – despite multiple application fees paid.
The White House's recent crackdown on "junk fees" also aims to shed light on these additional application costs, aligning efforts to also address extra fees assessed by airlines and live-event platforms.
The hope is that by making all fees public, fewer apartment complexes/landlords can surprise tenants and tenants will be better equipped to make fair comparisons between rental options while searching for a place to live.
Recognizing & Avoiding Scams
Sadly, rental fraud is also on the rise. According to a recent survey conducted by Dwellsy, around 85 percent of responding renters experienced financial losses as a result from rental fraud above $400 and 19 percent experienced losses of more than $5,000. Over 60 percent of respondents reported encountering suspicious activities on digital rental platforms, such as fake landlords trying to steal a rental payment or deposit.
To secure a fair and transparent rental agreement, awareness is crucial. Scam signs include:
- Photos look too good to be true
- Listing has grammatical/formatting errors
- Pressure to sign the lease or send money prior to touring
- No credit check required
Using a qualified rental finding partner who understands the local market helps tenants steer clear of unwelcome surprises. Scams can further be avoided by:
- Always requesting a tour
- Avoiding sending money by wire
- Asking to speak with the property owner/manager
- Disregarding listings that look/feel suspicious
Through programs like Extended Rental Assistance, NEI works directly with qualified rental finding partners – giving each agency both verbal and written guidelines outlining the anticipated needs of relocating employees, setting expectations, specifying timelines, and reporting protocols for the rental search. Following the agent's initial engagement with the transferring family, additional follow-ups between NEI and the partner occur during and after the rental finding trips. As always, communication is maintained with the employee through the lease finalization process.
In Summary
Renting an apartment can be complex, but being equipped with the right knowledge is critical to making it a stress-free process.
New tools from platforms like Zillow, Apartments.com, and AffordableHousing.com will undoubtedly aid employees, however, having multiple options, back-up plans, and working with a trusted rental-finding agency can make all the difference in ensuring successful employee transitions.
Ensuring the peace of mind and productivity of our clients’ employees remains our top priority. NEI’s Client Relations Managers work with each of their clients to discuss the most cost-effective approaches available. If you would like to discuss this or other relocation trends or cost-saving solution ideas, please reach out to your NEI representative.
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.
Protecting Renters: Avoiding Junk Fees and Spotting Scams
Apartment shopping can be stressful enough, but in today’s marketplace scammers and crafty custodians can lead to a financial maze with potentially disastrous results. This is why professional rental assistance can be so valuable.
New Rental Reality – Uncovering Hidden Fees
Median national rent prices continue to sit well above pre-pandemic levels, having risen by more than 18.5 percent in three years, and now account for 30 percent of the average American household income.
Hidden 'junk' fees and rental fraud make it difficult to accurately estimate the true cost of an apartment – especially when using different search engines online. These additional fees typically range from $5 to $50, which may seem insignificant, yet can add up with multiple line items to more than tenants budgeted for, as reported by The Wall Street Journal.
What makes the charges hard to contest is their attachment to specific services such as rent processing, trash removal, mail sorting, parking, pets, "January Fees" (an added charge in some states on the first month of the year with no apparent benefit to tenants) and even “convenience” fees to collect tenant’s rent online…which is a convenience for landlords.
Enhancing Rental Transparency
Beyond the obvious financial implications, the lack of transparency associated with these fees can mislead renters into choosing an apartment they believe is affordable, only to discover unexpected costs. Even before the pandemic, over 20 million renter households expressed concerns about housing costs jeopardizing their financial stability, according to a March report by the National Consumer Law Center.
In response, the White House took steps to enhance transparency and several online platforms have agreed to work towards disclosing all fees. Examples of efforts include:
- Zillow.com plans to display a "cost of renting summary" on its active apartment listings, summarizing all additional fees.
- Apartments.com will introduce a calculator to help renters determine the total cost of renting an apartment.
- AffordableHousing.com will ensure owners disclose all refundable and nonrefundable fees upfront in their listings.
These tools aim to make apartment hunting more transparent, allowing individuals to compare options and reduce uncertainties.
Application Fee Awareness
Prospective renters often contact multiple owners or property managers and visit several places during their housing search. Each rental application entails a fee, ranging from $50 to hundreds of dollars. This is supposedly to cover office work and background/credit checks. In a tight rental market, applicants frequently apply to multiple properties, and inaccuracies in tenant screening reports can lead to repeated rejections – despite multiple application fees paid.
The White House's recent crackdown on "junk fees" also aims to shed light on these additional application costs, aligning efforts to also address extra fees assessed by airlines and live-event platforms.
The hope is that by making all fees public, fewer apartment complexes/landlords can surprise tenants and tenants will be better equipped to make fair comparisons between rental options while searching for a place to live.
Recognizing & Avoiding Scams
Sadly, rental fraud is also on the rise. According to a recent survey conducted by Dwellsy, around 85 percent of responding renters experienced financial losses as a result from rental fraud above $400 and 19 percent experienced losses of more than $5,000. Over 60 percent of respondents reported encountering suspicious activities on digital rental platforms, such as fake landlords trying to steal a rental payment or deposit.
To secure a fair and transparent rental agreement, awareness is crucial. Scam signs include:
- Photos look too good to be true
- Listing has grammatical/formatting errors
- Pressure to sign the lease or send money prior to touring
- No credit check required
Using a qualified rental finding partner who understands the local market helps tenants steer clear of unwelcome surprises. Scams can further be avoided by:
- Always requesting a tour
- Avoiding sending money by wire
- Asking to speak with the property owner/manager
- Disregarding listings that look/feel suspicious
Through programs like Extended Rental Assistance, NEI works directly with qualified rental finding partners – giving each agency both verbal and written guidelines outlining the anticipated needs of relocating employees, setting expectations, specifying timelines, and reporting protocols for the rental search. Following the agent's initial engagement with the transferring family, additional follow-ups between NEI and the partner occur during and after the rental finding trips. As always, communication is maintained with the employee through the lease finalization process.
In Summary
Renting an apartment can be complex, but being equipped with the right knowledge is critical to making it a stress-free process.
New tools from platforms like Zillow, Apartments.com, and AffordableHousing.com will undoubtedly aid employees, however, having multiple options, back-up plans, and working with a trusted rental-finding agency can make all the difference in ensuring successful employee transitions.
Ensuring the peace of mind and productivity of our clients’ employees remains our top priority. NEI’s Client Relations Managers work with each of their clients to discuss the most cost-effective approaches available. If you would like to discuss this or other relocation trends or cost-saving solution ideas, please reach out to your NEI representative.
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.
