Rentberry, a San Francisco-based Tech Team Brings Transparency to Rental Markets
If you’ve ever attended an open house in San Francisco, you understand; and if you haven’t, you can’t possibly imagine what an utter circus the rental market is.
Or that’s how it used to be, at least. But now it’s not just cities like San Francisco or New York where finding a rental home is an arduous task. With more adults opting to rent rather than buy in 2017, competition to land a coveted rental home isn’t just limited to highrises in coastal cities. Take Denver, for example, where rental prices grew another 3% in only 12 months — just ahead of Austin’s 2%, according to a study conducted by the Denver Post. As renting more and more becomes the norm, it seems that no city in the country is safe from the joining the circus.
The frustrations with renting hardly stop once a tenant has caught the attention of a landlord. The time-consuming and costly process tends to range from irritating to painful, with its manually submitted applications, written references, and credit checks. Bidding wars with other prospective tenants and uncomfortable face-to-face negotiations with landlords are commonplace. For most Americans, a personal checkbook is a once-a-month necessity that makes an appearance for the sole purpose of writing a single rent check. It’s strange, but even in 2017 renters find themselves wondering: Why does finding an apartment still feel so utterly archaic?
Founded in late 2015, Rentberry sought to the answer that question. Billing itself as a “transparent home rental service and a price negotiation platform uniting tenants and landlords,” Rentberry automates typical tasks that go hand-in-hand with renting property — tasks such as e-signing rental agreements, paying rent online, and submitting personal information and credit reports.
As of 2017, the company has raised $4 million dollars, boasts some 180,000+ rental properties is roughly 5,000 cities, and employs a team of roughly 25. Rentberry has a ICO (initial coin offering) scheduled for December 5th.
The ICO marks an exciting time for Rentberry, but the startup isn’t without its controversies. There are concerns that because it requires its users to bid for property, in cities like San Francisco or New York that are very high demand and where there is no ceiling in terms of income, what’s to stop a landlord from simply picking the highest bidder? In other words, the platform assumes that landlords care about the integrity of the tenant over making more money per month, which may be optimistic.
On the other hand, there’s an argument to be made that landlords truly do care about having a tenant with good credit and good references. Some markets aren’t as competitive, and not every city is a San Francisco or New York. For a property manager in Albuquerque, the difference in potential monthly income between two parties may not be hundreds of dollars a month — and then, sure. One could argue that a landlord would pick the family who’s lived in the area for 30 years over a young kid with expendable income and a penchant for relocating every six months.
But that doesn’t change the fact that gentrification is a very real thing, and, in San Francisco for example, very large groups of people have been displaced due to rent spikes in recent years. Market bidding happens behind the scenes anyway; Rentberry isn’t the cause of this. But at the same time, being a San Francisco-based rental platform that may drive up prices isn’t an easy pill for everyone to swallow.
Their contentious identity is one that the company hasn’t necessarily shied away from. “Since our latest version went live in early 2017, mainstream media has referred to us as a ‘truly disruptive real estate technology,” Rentberry’s whitepaper boasts.
And there is something truly disruptive about Rentberry’s innerworkings that’s talked about less than other aspects, possibly because it’s not as easy to understand. Blockchain, the crux of the startup’s technical appeal, isn’t a widely understood system. Comprehending how blockchain and smart contracts work is like knowing in full detail what happens to a paper rent check the moment it leaves our hands. But according to the company’s whitepaper, “Rentberry is convinced that blockchain technology combined with smart contracts is the core engine for the long-term rental industry.”
So what does that mean? The important thing to know about blockchain, on a very simplified level, is that it’s a secure way to transfer assets. An easy example of that is Bitcoin, the cryptocurrency that has been gaining popularity in recent years. Rentberry plans to use BERRY, its own cryptocurrency which, like Bitcoin, is appealing in that its history cannot be tampered with. In a nutshell: Users data can be managed much more securely.
Payments aren’t the only thing that Rentberry is throwing on the blockchain. The company plans to use “smart contracts”, a self-enforcing protocol that essentially provides another layer of security to a whole host of Rentberry’s functions including the identity of both the tenant and landlord, each parties unique access “key”, all traditional rental agreements by both parties and all monetary activities — among others.
Blockchain technology is emerging as a leader in restructuring archaic systems. Today’s rental market is steeped in cumbersome transaction times and a lack of transparency. Like all new companies, Rentberry is working its particular kinks out. Streamlining processes that the public have written off as a necessary nuisance is a constructive cause. Couple that with initiatives to increase personal security, and Rentberry is certainly one to watch.