Scams are usually very prevalent for short-term rentals, but during the pandemic, when the entire rental market ground to a near halt, scams dried up. “Scammers need the market to be pretty strong so that they can put up a fake listing and get a lot of inquiries before their ad gets taken down,” explains Philip Horigan, founder of Leasebreak, a short-term rental listing site.
That was then—the rental market is soaring now. “Demand has surged, and this is where scammers thrive,” Horigan says. But you might be thinking—what’s the worst that could happen? A short-term stay is, of course, short. It’s not a big commitment.
Well, imagine signing a three-month lease, only to be kicked out after two weeks by the landlord because the sublet was not legal. Or paying a security deposit to reserve an apartment listing that turns out to be fake—and suddenly the email address you've been using is no longer working. Wouldn't it be better to avoid these bad situations completely?
[Editor’s Note: A previous version of the article ran in May 2021. We are presenting it again here as part of our summer Best of Brick week.]
First, it’s important to know that short-term listings are limited in New York City. Many apartments here are co-ops, which do not permit short-term leases. Condo buildings cannot prohibit leasing, but they can require minimum and maximum lease terms, so some condos may have rules against vacation rentals.
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Keep in mind that renting an entire apartment (when the owner is not present) for less than 30 days is always illegal in New York City, despite the availability of many such apartments on Airbnb and similar sites. It's safer to choose extended-stay options like AKA and Sonder, or perhaps a spare room in an occupied apartment through a vacation-rental site.
Some listings may be for illegal listings, and then there are those that are completely fake.
“You almost have to think like a scammer in order to catch them, and I’m always amazed by how much work they put into making a listing look authentic,” Horigan says. He thoroughly vets listings and often hears from renters who have had a bad experience elsewhere.
In one case, the email address matched the owner’s name (unbeknownst to the owner) and the lease appeared to be legitimate, and there was a licensed broker involved.
“After about 20 emails, the scammer says, ‘Sorry the current tenant won’t let us in to show the apartment, and this is New York City, so we have other people vying for the apartment and the only way we can reserve it for you is if you put some money down in advance to hold it,’” Horigan says. He advised the renter to back out ASAP. Asking for money to hold an apartment sight unseen is a major red flag.
Before you sign the dotted line—or fork over any money—read the following time-tested tips from NYC real estate experts.
How to find a legal short-term rental
Elizabeth Kee, a broker at CORE, recommends hiring a licensed real estate agent who specializes in short-term rentals or to use a reputable short-term rental agency or listing site, such as Apt212 and Leasebreak. “They screen for buildings where the landlord permits short-term rentals,” she says.
Philip Lang, co-founder of real estate brokerage Triplemint, says furnished rental companies like Blueground and Furnished Quarters that are geared toward the corporate travel market provide flexible leases. They have excess inventory these days with the halt in business travel.
He also points to larger, national companies with significant inventory that can absorb the cost of having vacancies and renting them out on a short-term basis. Two to try: Equity Residential and Related Luxury Rentals.
A site called no fee rentals for apartments in 50-plus Manhattan buildings managed by Jakobson Properties has a limited number of short-term rentals.
Finally, for a turn-key approach to renting, you could consider one of the 15 or so co-living companies in NYC, some of which allow minimum stays as short as 30 days, or even (more rarely) a single night. Check out Brick Underground's guide to co-living for a breakdown of what these types of buildings offer.
What are common red flags to watch out for?
Follow your gut—if it doesn’t feel right, it probably isn’t. Horigan, who puts any questionable listings under review until they are cleared, suggests the following strategies. (He says if you have any questions about the validity of a listing you can email Leasebreak for feedback.)
- The listing should include the real address so you can research the building. “Scammers hate websites that use real addresses because it means that the public is doing their own homework on it,” Horigan says. If it’s a doorman building, speak to the doorman if you can—they know everything. Horigan says lots of scams have been caught out this way. “The doorman will say, ‘Yeah we’ve been getting calls about that unit but it’s definitely not available.’”
- The rent should not seem too good to be true—look at other rentals in the same building or similar units. Don’t succumb to wishful thinking.
- If the listing is by a real estate agent, make sure the email address is from a company rather than a personal Gmail account—and even then check the brokerage website to make sure the broker is actually employed there. Also check to make sure the broker is licensed by the state.
- Don’t assume that connecting frequently via text or phone or WhatsApp means the person on the other end is not a scammer. “They can coax you into a comfort level and at some point you believe them,” Horigan says.
- You or someone you trust should be able to physically see an apartment before putting money down. “The scammers will always come up with some excuse for why you can’t see it, but it’s not worth the risk,” Horigan says.
- Any kind of pressure to "hold" the apartment before you view it because they have other "interested parties" about to sign is a red flag. Proceed cautiously, he says.
- Always ask for a copy of the lease—there is never a reason why that cannot happen. But because leases can be faked, Horigan advises always checking directly with the landlord to make sure it’s the real deal.
- Sometimes an apartment is listed directly from an owner or landlord, but all of a sudden you are dealing with a broker, usually with a very common name—which means there is almost certainly a broker licensed with that name. This makes it harder to prove the broker is not real. “Ask yourself why wasn’t the apartment listed by a broker to begin with? If the landlord is paying the broker, why is the landlord spending time/money/energy advertising it?” Horigan asks. If it doesn’t add up, it may be a scam.
- Some renters assume scammers only post on free sites. It’s not true—scammers will pay to post a listing or even feature it. “The money they can make scamming you is way more than it cost to post and feature,” Horigan says. Plus by appearing on paid listings sites, they gain trust and credibility.
Also know that under the new rent laws in NYC, a rental landlord is not allowed to charge more than $20 for an application/credit check or take more than the equivalent of one month’s rent as a security deposit.
Some New York City landlords offer a free month (or more) at the beginning or end of a lease. The advertised rent is the net effective rent. The net effective rent is less than the amount you will actually have to pay --- known as your gross rent --- during your non-free months. Brick Underground's Gross Rent Calculator enables you to easily calculate your gross rent, make quick apples-to-apples comparisons between apartments and avoid expensive surprises. All you'll need to figure out your gross rent is 1) the net effective rent, 2) the length of your lease, and 3) how many free months your landlord is offering. [Hint: Bookmark this page for easy reference!] To learn more about net effective versus gross rents, read What does 'net effective rent' mean?. If the landlord is offering partial months free, enter it with a decimal point. For example, 6 weeks free rent should be entered as 1.5 months.
Gross Rent Calculator
Some New York City landlords offer a free month (or more) at the beginning or end of a lease. The advertised rent is the net effective rent. The net effective rent is less than the amount you will actually have to pay --- known as your gross rent --- during your non-free months.
Brick Underground's Gross Rent Calculator enables you to easily calculate your gross rent, make quick apples-to-apples comparisons between apartments and avoid expensive surprises. All you'll need to figure out your gross rent is 1) the net effective rent, 2) the length of your lease, and 3) how many free months your landlord is offering. [Hint: Bookmark this page for easy reference!]
To learn more about net effective versus gross rents, read What does 'net effective rent' mean?.
If the landlord is offering partial months free, enter it with a decimal point. For example, 6 weeks free rent should be entered as 1.5 months.
How do you know if sublet is allowed by the building?
Consider the source. Reputable brokers will have relationships with owners and be familiar with boards and building management companies.
Horigan says a lot of times NYC renters simply don’t know the rules—and that even though they are not trying to scam you, they might be subletting the apartment in a way that could get you evicted. For example, a renter in a condo was trying to sublet his unit for a month or two. “No way would that be allowed when he wasn’t even the owner,” Horigan says.
Lang says he occasionally gets requests from owners who are going away for the summer and are looking to sublet their condo unit for a few months. Those may be allowed, depending on the building’s house rules, which every owner is required to abide by—you can always ask them to provide you with confirmation.
What are you looking for when you ask to see the lease?
When you ask to see the lease, you are looking to confirm that the apartment owner and the building (or landlord) permits short-term leases, or that the tenant’s lease permits subleasing—and if so, whether it requires the landlord’s written approval.
"If the person won’t show it to you, chances are it doesn’t expressly state in the lease that subleasing is permitted,” Kee says. Or it could explicitly rule it out. “Never lease an apartment without a written agreement signed by all parties," she says.
Why are short-term rentals tricky for landlords?
If the term is less than 90 days, the person renting out the unit may be considered a “hotel operator” (as is the case with Airbnb and VRBO) and would be required to pay a hotel tax plus a daily hotel unit fee to the city.
Once someone occupies an apartment for more than 30 days, they have some of the rights of a regular tenant—even if they are in the unit illegally. As Kee puts it, “Evicting a tenant for nonpayment or a hold-over (staying beyond a lease term) can be costly, and tenant's rights are fiercely protected in New York City."
In a legitimate short-term rental, you should expect to be screened in the same, thorough way as for a long-term lease. This is especially true in light of the new rental laws, which prohibit deposits greater than the equivalent of one month’s rent—which used to be the way landlords would protect themselves against someone, for example, with a poor credit history.
Horigan says an owner he works with regularly doesn’t care if a renter is staying in his apartment for only one month, he always does a full background check. He requires a credit check, bank statements, letter of employment, and tax returns.
If you don’t experience similar vetting, question why. Wouldn’t you want to vet a renter thoroughly before handing over the keys to your apartment?
—Earlier versions of this article contained reporting and writing by Jennifer White Karp and Evelyn Battaglia.
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