For almost as long as there has been currency and housing, there’s been rent — and all the inefficiencies, uncertainties, and frustrations that typically come with it. Writing and depositing paper checks, anxiously awaiting the return of a security deposit, and other commonplace inconveniences of renting are making way for new digital improvements — and the days of paper checks and long waits may soon be a thing of the past. Here’s a look at some of the fintech (financial technology) solutions that are changing the way we think about rent for the better.
Simplifying Rent Payments
One of the biggest changes fintech has brought to the rental market is the streamlining and simplification of rental payments. To their credit (pun intended), banks and financial institutions have recognized the need to update the way they handle rentals and are now offering digital alternatives to the slow and sometimes unreliable traditional alternatives.
Chase Bank, for example, has put in place a platform that allows tenants to set up automated, recurring rent payments directly from their accounts. Though this isn’t ideal for every renter, it makes the rental process both easier and more secure by avoiding the need to write checks or transfer money. This way, there are no disputes or late payments — it’s just taken care of.
But that’s far from all. A number of other emergent technological solutions are also disrupting the 21st-century rental market:
Rental Deposit Insurance
Even the words “security deposit” might be enough to send a chill down the spine of renters and landlords alike. Traditional security deposits often present a significant financial challenge for renters, and getting them back can be a laborious process. Many fintech companies now offer a form of renters deposit insurance, which allows tenants to pay a smaller premium instead of a hefty upfront deposit. This makes it easier for renters to find a place to live, and also ensures they have a safety net in case things go awry.
Another common hurdle renters frequently face is getting approved for an apartment, especially if they have a troubled (or nonexistent) credit rating or are in a non-traditional career (like freelancing). Some fintech companies are providing a different kind of insurance called guarantors insurance, which provides a financial safety net for people like students, foreign visitors, and others who might need a leg up on securing an apartment.
Renter’s Reward Apps
No doubt many of us are already familiar with loyalty apps for things like supermarkets, fast food places, and our favorite retailers. But a reward app for renters? It’s actually a thing. Companies such as Rent Perk have launched reward apps that incentivize paying your rent on time. Tenants can earn discounts, gift cards, or cash back by consistently paying their rent on time. This is a win-win, as it can strengthen positive landlord-tenant relations and promote financial responsibility.
Rent Management Platforms
We’ve already discussed Chase Bank and the ability to pay your rent automatically according to a schedule, but that’s just the tip of the iceberg. Other fintech platforms, such as Paymatrix and Esusu, offer a much wider array of services, such as tenant screening, deposit collection, signing of rental agreements, and more. These platforms also frequently encourage the purchase of renters insurance, an under-utilized means of protecting your belongings and liability in case of burglary, theft, or an injury in your rental unit — more on that below.
Rent History Reporting
While an app that reports one’s rent history sounds like it would primarily benefit landlords, that’s not actually at the heart of this fintech innovation. Some fintech companies are hoping to include rental history in credit bureau reports. It’s easy to see how this could be a positive thing for renters — pay your rent on time, and those timely payments could help build your credit score. Having a high credit score makes lots of other things in life easier to acquire, most notably loans and credit cards.
What to Know Before You Rent
Something many renters overlook when they move into a new apartment is renters insurance. Many are under the impression that you don’t need insurance unless you’re a homeowner — but that’s simply not true. Renters insurance not only protects your belongings in case of theft or destruction, but can also help you with a place to live in case your unit becomes uninhabitable for some reason. And it’s very reasonably priced — Ross Martin at The Zebra has the hard numbers: your average renters insurance policy is $233 annually, or $19 per month.
Insurtech companies, such as Sure, have seen the market potential of this, and are partnering with fintech platforms to provide an integrated renters insurance solution into their apps. Much as the payment process is being streamlined by technology, soon purchasing a renters insurance policy may be as simple as a few clicks or taps.