A US website that allows landlords to set a preferred rent for properties and prospective tenants to then bid against each other for the tenancy is planning a major expansion in the US.
What is Rentberry?
The Rentberry website, which was only launched a year ago, is described as a ‘transparent’ home rental service and price negotiation platform. It focuses on long-term rental properties, which, up until now, have been based in some major cities.
For Tenants
For tenants it automates the normal US rental tasks such as submitting personal information, credit reports and custom offers (offers for less than the rental price), e-signing rental agreements and online rental payments. The fact that tenants can see the highest bids and the number of people who applied for a particular property means that tenants don’t have to enter into a closed or partially closed bidding system. With Rentberry, tenants can also see relevant information about the landlord.
With the Rentberry platform, tenants have the opportunity to perhaps (depending on the bidding) get a deal on the rental figure. The cost for tenants to use the platform is $25 fee, which is paid once the rental agreement has been signed.
For Landlords
The bidding aspect of the Rentberry platform arguably allows less certainty of reaching the preferred rental figure, but it enables landlords to advertise their properties quickly to a large number prospects. The platform also takes the work out of the admin tasks. Crucially though, the platform allows landlords to see the bids, and information about their would-be tenants (including their credit score).
Expansion for Rentberry
After just a year the Rentberry platform has 100,000 properties and more than 50,000 users on the site. This has fuelled the latest plans to expand to offer listings across the whole of the United States.
Growth Drivers
Drivers for the Rentberry platform have been the fact that in the US, more than one-third of households are renters (nearly 110 million people), mortgage rates are up, and there have been millions of foreclosures across the country in recent years.
Criticism
Despite the platform’s popularity and expansion, it has attracted plenty of criticism. The main criticisms are that:
- The website will favour the most affluent, particularly at a time when rent increases have outpaced incomes in many US cities.
- The website could help to push rental prices up.
- Choosing tenants based on data alone may not lead to a successful rental arrangement. There is often no substitute for actually meeting each other.
What Does This Mean For Your Business?
With homes becoming less affordable, particularly for first-time buyers in the UK, with the UK rental market growing, and with more estate agency services going online, there could be an opportunity for this type of model to work in the UK. The fact that Rentberry has worked well and has the experience in the US could also mean that it could expand to other countries, thus becoming a threat to estate agent service providers already in the UK.