A growing number of startups are helping renters and landlords navigate an increasingly hot rental market. Some companies aim to teach cash-strapped renters how to qualify for an apartment and budget for hikes in rental costs, while others help them raise thousands of dollars for a security deposit or improve their credit to get approved for a lease.
Still others are focused on protecting landlords. For example, startup company Rhino offers security deposit insurance for landlords, guaranteeing that they will be reimbursed for any damages if a renter violates their lease or trashes their unit. The insured amount is double the security deposit. The tenants also are required to reimburse the insurance company for any damages they may incur or for a broken lease.
Another startup called Jetty helps renters come up with a security deposit. The company charges renters a one-time fee of 17.5 percent of the value of their security deposit (e.g. on a $1,000 deposit, the renter pays $175). They’ll also be a guarantor for the apartment. Clients will pay about 5 percent to 10 percent extra for the year. Jetty is currently available in 45 states. “[Security deposits] are a massive amount of money that many people don’t necessarily have on hand,” Patrick Briggs, vice president of growth at Jetty, told realtor.com®. “This is really a good way for people to access the apartments they don’t have the upfront cash for.”
And since 2000, SureDeposit has been offering security deposit insurance to landlords. “It effectively allows a renter to move in at a lower price point,” says Kyle Gelsthorpe, the company’s vice president. SureDeposit was acquired by insurance company Assurance in 2011.
Income requirements are another common hurdle for renters trying to qualify for an apartment. A company called The Guarantors will step in to provide renters financial assistance if they have trouble paying their rent on time. Renters are charged about 5 percent to 10 percent of their annual rent through the term of their lease for the service. “Landlords just look at surface-level finances like credit score and income. We dig a bit deeper to understand the real financial picture,” says Michael Mirandi, chief of staff at The Guarantors.
Some financial experts caution that renters need to be careful about using programs that allow them to get around rental restrictions. “I’d caution people [against] using these services,” says Roger Ma, a certified financial planner and real estate agent based in New York. “Doing so may allow you to overextend yourself [financially].”
Source: “Rent Break: New Startups Help Remove Financial Hurdles to Finding Dream Apartments,” realtor.com® (March 29, 2018)
