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How To Avoid Real Estate Scams Including Rent-To-Own

house for sale sign

When your home deposit isn’t enough to get you into your own home, another way to get on the property ladder is with a rent-to-own lease option.

Like all real estate purchase strategies, the rent-to-own has had its fair share of scams, so how do you know if you’re being offered a real deal?

This article looks at how you can protect yourself as the tenant signing on to a rent-to-own lease.

Real Estate Scams

Where ever money is involved, scammers are sure to follow. Real estate has a target on its back, i.e. criminals always looking for ways to part you and money.


It’s not just the big-ticket items that have targeted, and household removals are one sector that attracts small-time opportunistic criminals. This type of crime is so pervasive that link to a help guide on how to make the right choice when you need to hire movers.

Thankfully the internet is full of useful information, so do some keyword searches and read up on what to do to keep your assets safe. Other types of scams in real estate include:


Scammers are creative with their marketing, and their adverts look authentic. However, remember if the deal looks too good to be true – it is, so avoids responding to ads that offer help with your mortgage repayments. Instead, always use legitimate resources suggested by the government, and this way, you get started on the road to recovery without delay.

Renting Scams

Tenants are not off-limits when it comes to scammers wanting free money. Unfortunately, rentall property listings are not always real. Scammers will list fake properties for rent and go through the process to eventually take your deposit, i.e. bond and rent, in advance. However, renters with a little bit of know-how can follow the correct procedures when applying for a rental to avoid scammers activity.

Rent to Buy Leases

There are many types of fraud in real estate, including rent-to-buy leases. So how can you tell if you’re going to be a target of a scam? Well, it takes some knowledge as the scammers are artful in their craft.

The rent-to-own deal is a lease that has an end date, and at that time, the renter becomes the purchaser. The lease term can take a few months or many years, i.e. as long as five years.

So what rent-to-own scams do you need to avoid?

Here are six ways you can tell your rent-to-own lease deal may not be legitimate.


Targeting distressed homeowners

As a homeowner struggling to make ends meet and starting foreclosure proceedings, he welcomes the arrival of someone who says they can stop the foreclosure process by buying your home and renting it back to you. Wow, what luck, this makes a bad situation go away – better than foreclosure.

However, it is a deal too good to be true. The purchaser is not legitimate – they’re a scammer. How do you know – well, they’ll ask for a rent deposit ‘before’ they’ve purchased your home. Then, they keep your deposit, and that’s the last you see or hear from them.

Shady Landlords

With the rent to own option, there is usually an option fee that the landlord pockets. Greedy landlords will be eyeing the fee as easy money and target renters who’d love to own their own home even though they have failed every way to do so. These landlords target renters they know don’t meet the criteria to buy a home, i.e. have a poor credit rating and convince them they will be the eventual owners. Then they find ways to break the contract and keep the option fee.

Contract fees and restrictions

Additional fees besides the option fee is a sure sign the deal is not a good one. Additional fees may include application fees, home viewing fees. Plus, be aware of unfair conditions and favor the Landlord where the option can be canceled, and the payments pocketed.


The ideal way to get on the property ladder is to become the homeowner outright, but that’s not the only way. Rent to own contracts does work when they are mutually beneficial to the vendor, aka landlord, and the renter, aka purchaser. Do your research, and always get financial advice from an expert before signing a contract or parting way with any money, no matter how large or small.

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