Renters Want to Pay 1 Year Rent Up Front

[Maggie Shortridge]

Hi. I have a home in a highly desirable residential neighborhood that I rent out.  (I used to live there, but got married and moved into my husband's house.)   My former tenants recently moved out and I relisted it this week. A lady responded saying she was moving here from out of state with her husband and 2 kids, and they want to rent it sight unseen and pay an entire years rent up front. She says they are closing on their own house this week and says they made "a killing" on it.  They are moving to my state to go into the property investment business here. (This was all by phone and she sounded educated and nice.) She then asked me "How is the market there"? Which I thought odd, but maybe she just wanted my take because I would assume they would have researched it.   Anyway, on the one hand I can understand just wanting to pay up front and not bother with writing checks for a year AND our rental market is very competitive so I can get the "sight unseen" AND this is a very desirable coastal town.  But going sight unseen AND offering to pay a year up front is rubbing me wrong.   Is it me, or does this seem too good to be true? She says they plan to rent for a year until they find something to buy.    Moving here immediately after they close in a week.  Leaving their former professions to be property investors here.  Said she has been having hard time finding a suitable place in our town that will accept 1 year rent up front.

I will obviously check them out once I get the application, but wondering people's thoughts on this. Am I just getting lucky, or is this a scam or something?

[Jonathan G.]

You will get mixed opinions about this issue. Most people, myself included, feel this is a major red flag. There are others on here that would find acceptable in certain scenarios. First of all, why would someone do that?
Potential reasons:

1. Desperate to get in a new place because they know for whatever reason, when they are screened no one would want them. Reasons include bad credit score, history of the eviction, sex offender, criminal background, etc. sometimes they are actually in the process of getting evicted.

2. They are horrible with money. They know that they better cover their living expenses for as long as possible because the money bolus will quickly evaporate. This leaves you unprotected when it comes time to resume rental payments in one year. They won't have the money and you end up having to evict.

3. It's a scam. Whatever reason, they get your keys and after-the-fact, the checks are no good etc., etc., etc. These are professional tenants and now they have possession of your home for who knows how long while you spend thousands of dollars trying to get them out with lost rental income.

4. It's legitimate. They check out on your screening. They make enough money and are able to pay the rent. They live there for the full year however, they have multiple other families/persons living there that you were never aware of that would in no way ever pass your screening test and put a horrible amount of excessive wear and tear on your property and you are none the wiser and because you are sitting on a fat pile of cash, you are happy, while your house is falling apart under your nose. They even bring in their large dogs and their "American Yorkshire Terrier's" (also known as pit bulls), Smoke, do drugs, have multiple broken down cars in the yard/driveway, drink, stay up late, loud, drama, etc. etc. etc.

Remember, the hallmark of any good scam his emotions. Those emotions that come up inside of you intentionally by the scammer can be good or bad. While you are all giddy with elation about how awesome this can potentially be for you, they are simply setting the trap for a potential scam. Scammers can also manipulate you by getting you angry. The indifferent landlord solicits and retains the best quality tenant(s) and sticks to their criteria.

This question comes up a lot and at some point, somebody will likely make a sticky note about it. Just as an FYI, I had a applicant offer this and everything checked out. Everything! I still declined. Just made me nervous.

I hope you find this information helpful.