Controversial rental platform Rentberry just announced it's going national with its services, and a lot of people - namely renters - are unhappy about it. Under Rentberry's business model, a lease is placed into an auction format and potential renters bid on what they want to pay for the home. The landlord is given the bidders' information and makes the decision on who gets to rent the property, based on the bids and the bidders' backgrounds.
In Rentberry's announcement, it says that over 100,000 properties are available on the site and it continues to grow. The start-up is based in San Francisco and has tested its model there, as well as in New York and a few other cities. It has reportedly saved tenants an average of five percent on rents thus far, according to information given to Gizmodo. The five percent saved is off of what landlords are listing apartments at, because Rentberry allows renters to bid below the asking price and potentially only pay that much. However, as Gizmodo notes, Rentberry has the potential to increase the rents in these large cities (like San Francisco and New York) in the long run because of the amount of people, though smaller markets could see a real decrease.
Creator Alex Lubinsky told SFGate last year that "property managers, who naturally are looking to expand their cut while enhancing rents for their owners, have been especially receptive to Rentberry." He said that even though it seems a middle man adds hassle and cost, it actually allows the landlord to get closer to their money's worth and it allows a potential tenant to spend less time searching for a place.
This process is also advantageous to landlords because Rentberry builds in the background check. Renters have to submit to credit checks during the bidding process to speed up the decision, which is convenient for landlords. The new and improved Rentberry also allows landlords to collect rent through the site and accept maintenance requests.
In the end, this all sounds highly beneficial for landlords because it opens up the pool for potential tenants and streamlines their process . . . but not necessarily so much for renters. While the numbers show potential for a decrease in rent in certain markets, renters have to enter into what is essentially a bidding war with everyone else who wants an apartment, and in cities where real estate is hard enough to come by as it is (hello, San Francisco and New York), this feels like an added pressure, not to mention it's almost all done online so you don't even get much face time with a landlord who might be more inclined to pick you upon meeting you in person. (Live and in-person open houses are still possible through Rentberry, though!) Rentberry also charges a success fee of $25, though that might change in the future. As of now, everything else through Rentberry is free to use.