How To Avoid Rental Scams Overseas

Sam’s Story—How To Avoid Rental Scams Overseas

Yesterday, Kathleen gave you some advice on how to find a rental in a new country. She pointed out that you can’t do this long distance over the Internet…not if you want to avoid surprises. Unfortunately, sometimes, even if you’re on the scene searching and scouting in person, you still can have trouble.

This was the case for Sam, an intern who came to work for us a few weeks ago. Sam showed up in Panama and checked himself in to a Panama City hostel, where he planned to stay until he was able to find longer-term rental accommodation.

At first, it seemed Sam was in luck. His first weekend in the city, he connected with a local landlord. He found the guy on the Internet, on Encuentra 24, which is the go-to site for just about anything you want to buy or sell (or rent) in Panama.

Sam found his would-be landlord over the Internet, which can be dangerous, but he was already in Panama City and, so, able to arrange a face-to-face meeting. Which he did. The guy showed Sam the apartment, which seemed acceptable. However, it was the week before Carnaval, and the owner explained that he would be away, in the interior, for the holiday. He’d take the deposit now to hold the apartment. Then Sam could move in “after Carnaval.”

Carnaval came and went, and Sam followed up and followed up, but the owner was one excuse after another…

“I’ve decided to stay in the countryside a couple of more days and will meet you to give you the keys when I’m back in Panama City on Thursday…”

Then, on Thursday, “The apartment is being painted, but you’ll be able to move in in a couple of more days…”

On and on until, finally, the owner stopped answering his cell phone…and Sam began a search for a new apartment.

Our staff has been trying to help Sam to get his deposit back, but Alberto, our driver, the most Panama City street smart among us, says there’s little chance of this. “Sam got hooked up with some gangsters,” Alberto says solemnly, shaking his head, every time the subject comes up.

The guy who has stolen Sam’s money in the form of a rental deposit for an apartment that may or may not belong to the guy…and that may or may not be available for rental probably isn’t actually a “gangster.” But he is a scam artist. You need to know how to spot these guys, because you find them everywhere.

Sam is a smart kid who has been traveling around the world for some time. In other words, this isn’t his first experience in a new country. As he put it, though, retelling the story over drinks at last Friday’s staff happy hour, “I was naïve.”

Everything’s clearer in hindsight. The red flag here was the “owner” asking for a cash deposit on the spot without a contract to sign and without handing over keys. Seeing the apartment you think you’re renting isn’t enough. The apartment or the room or the house can exist. But without some kind of paperwork, you don’t know that the guy offering to rent it is in a position to do that…and, should something go wrong later, without any documentation, you have no recourse.

This can be tricky, though, because it’s not uncommon for short-term rentals most anywhere in the world, even those managed by an agency, to be paid for in cash. Owners don’t want to pay credit card processing fees…and, in some cases, don’t want any paper trail because they don’t intend to report the income (because they don’t want to pay taxes on it).

All landlords and agencies anywhere are going to want some deposit up front, meaning you’re going to have to hand over some payment, perhaps in cash, before taking up occupancy. So, again, it’s tricky. Pay attention to your instincts. And don’t make a deposit or any payment without some receipt and without receiving keys (that you know fit the lock in the front door to the place you’re intending to rent!).

Whenever possible, leave the deposit by credit card or Paypal. Many agencies in France, Italy, and elsewhere in Europe, for example, want you to wire your deposit to secure the rental in advance. This can be ok if you’re dealing with a reputable agency. It’s not something I’d recommend for an apartment you found on or when dealing direct with an “owner.” Central America doesn’t have the monopoly on rental scams.

Lief Simon

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