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Bidding Website Rentberry May Be the Startup of Your Nightmares (gizmodo.com)
Renting is already fraught with pain, from annual rent hikes to extortionate lettings fees. But if a new service called Rentberry takes off, it could be about to get a lot worse. From a report: Rentberry has been operating in test cities and angering affordable housing advocates since 2016. But with its new expansion into 1,000 cities in the United States, the rental bidding website is about to piss off a lot more people. Alex Lubinksy, founder of Rentberry, seems to be pursuing an image that's closer to Uber's vilified Travis Kalanick than the do-gooder model of Elon Musk. Lubinsky courts the controversy that surrounds his startup and is known to include negative press when communicating his vision to reporters. But one big difference with Rentberry will be that if it takes off and becomes the new standard for renting apartments, most of its customers won't be able to run a #deleteRentberry campaign because landlords will have the control. The website essentially functions as a cross between CraigsList and eBay. A landlord lists a rental space and potential tenants bid against one another to claim the lease. Tenants' personal information is available to the landlord. The landlord then makes their final decision by weighing what the best offer is along with which bidder seems like they'd be the best tenant. For now, Rentberry charges users a $25 fee, but in the future, it plans to charge 25 percent of the difference between the asking price and the agreed upon rent. Whoever received the better deal pays the fee -- every month.
This service is effectively illegal in Quebec.
Enjoy paying $3000 for a shithole in Manhattan you anti-regulation lunatics
As a landlord we'd never use this service. Who the hell is gonna show the apartments and however long the bidding war takes means I am out that money if I just could have gotten it rented. And I have to pay a fee for my unit being vacant because of some stupid bidding war, and all my leases will just have random dates instead of something standard like the 1st of the months?
Sounds like a really stupid idea for most landlords
I can tell you that before rentberry, the price is pretty much set by the market. You really can't raise it or even lower it much. Frankly, I can't see rentberry changing this much, any more than AirBnb already has. If rents get too high, people either move further out and accept a longer commute, or they buy. People flock to the cheaper areas.
The difference between a profitable landlord and a poor one is mainly due to two factors (both even more important in the age of AirBnb):
a) Keeping every apartment/ room filled. A vacant apartment eats all your profit. If you have a large enough portfolio of rental units, this becomes an accepted cost of doing business, but if you four or less units, it kills your profits.
b) Avoiding the bad tenant. The guy that needs to be evicted, or simply destroys the place. There is ZERO chance I would trust a website to figure out who is a good tenant and who is a bad one. You need to meet them in person and see what if any requests or issues they have.
excitingthingstodo.blogspot.com
I own a duplex and live in one half. We do not cover our mortgage with the rental. I would look at this as an opportunity as, if you look at the laws in my state as well as many other Eastern states, the laws are heavily biased against the landlord. Because what the landlord sells is time, and you can never get that back.
So, what I found interesting is that the landlord gets information on the possible renters. That way, the landlord can pre-screen.
What we use now is Craigslist, Zillow and a broker (all three at once). We also put a sign out. We get "inquiries" off the websites and the only information I get is the name that the person decided to use on the website (which may not be real) and a phone number. When I call back the phone number to set up a showing, frequently the person will simply say, "Oh, I clicked by accident, I was just looking around." And I get no qualifications. Can they actually afford rent? Do they have full-time jobs? Are they the type that make their living off of screwing landlords (we had a couple who do that)?
So what we have is a long, three-page form we use for qualifications. We check credit, we check past employment. We check everything, except their last landlord who, if they are trying to get rid of a bad tenant will give them a very positive review. We also insist that their take-home pay is three times or more than the monthly rent.
Anything that would allow us to see who is interested in advance would be positive. As, if we need to get a tenant out, we are at a severe disadvantage. Landlords in our area must take at least three months in order to evict a tenant and, meanwhile, the tenant has full use of the apartment without paying any rent and will frequently trash it.
I do realize that lots of readers are good tenants who would never trash an apartment, and who always pay on time, but I have seen the other types and they are just not fun to live right up against. I never, again, want to hear the words, "You don't know what I'm capable of," from a tenant.
Gods don't kill people, people with gods kill people.
It sounds like the basic premise of this is to normalize "key money".
For those not in the know, sometimes property managers of hot properties will accept bribes from prospective tenants (either directly or through intermediary apartment "brokers") to secure leases for properties where the landlord has delegated rental lease responsibility to the property manager. Now it appears the landlord is going to get a cut of this in cold-hard cash and it will be recurring... Sad that they are attempting to normalize this practice... Maybe one of the founders was burned by a shady apartment "broker" in the past and decided that they wanted a piece of that action...
This feels like a joke. This is a joke right? Because the value proposition, besides creating controversy, doesn't make sense. It seems like they're offering to solve information asymmetries, when supply differs from demand. But this creates new problems.
Landlords Now need to figure out when to close their auction to get the maximal volume of the best tenants paying the best prices. How do I even think about that?
Renters need to figure out on which rentals to bid. It seems like bids are binding - are they not? Is there conditional bidding and Rentberry is solving so complex logic problem? Or combinatoric bidding where renters can win only one item?
to one month's rent. I'm sure Attorney General Healey is going to be very interested in this.